Saturday, 30 April 2016

My boss just pitched I start a second location to his business for an equity split. Should I do it, propose a franchise, or go it alone?

 

The facts:

  • For 7 months I've been worked as a freelance consultant with Bob, a guy who runs a small but successful business in Location A.

  • I never signed a contract and everything has been based on a handshake agreement to help him grow the business. This has worked well for both of us

  • At the end of this year I will be moving to Location B, a foreign city where I believe the concept could work well.

  • I have been looking into mimicking Bob's business in Location B. I think I could do it better than Bob is doing it

  • Bob is in an ongoing legal dispute with his current 50/50 business partner regarding input/output with the business

  • I do not trust Bob (see above for reasons)

  • Bob proposed I start the first international location for his company with an equity split.

  • I need $7K to start business in Location B. I do not have it.

Happy to clarify further if needed, but trying to keep it simple for the first post.

My options now are:

A) Start it on my own and find a way to raise financing (unsure if this is possible)

B) Start Foreign entity at Location by with a 49/51 equity split in his favour (he explicitly stated that less than 51 is a non-negotiable)

C) Propose a franchise relationship where I pay franchise fees, with the fees waived for the first few months and paid on credit for the first year

Bob is open to suggestions and I think might go where I push him to, but I need some help gaming out my options. Any advice appreciated.

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