Business takeover- they want to keep name and clients

[xkayla_herex]

Im going through the process of buying a beauty salon. My solicitor has been in touch and after looking at the contract the current owner wants to keep the business name (which is the owner actual name) - it says the names not included and the signage will be taken down at completion.(this was never the agreement- I mentioned to her that I might keep the name)

It says she is planning to do nails and Pedicures mobile business and some of the clientele of the salon have expressed a desire to use her services.

It also says the following is not included but can be brought from the current owner: the Apple Mac computer, the washing machine, console table, chairs and foot stall to the front of the salon, stock (excluding bio sculpture products lamps/tools- so I wouldn't be able to buy this of her) sunbed tubes- old and new - before she said everything is included other thank stock which I would buy at the end depending whats there and what i want, now she saying the computer and stuff is all extra - she wants me to buy the subbed tubes new and old- the old must mean the tubes in the subbed!! So if I don't buy them she's just going to leave me with sun beds with no tubes?!

There are two sunbeds that are being leased and can be transferred to me if interested - id have to get in touch with admiral leasing. I was told from the owner a number of times that she brought the sunbeds outright with a loan- so I presume I would take over the rest of the loan rather than it being an ongoing lease (again surely this would mean me keeping the sun bed tubes as this would of been included in the sunbeds package as o remember she said she brought a package that came with extra tubes)

Is it me or does this sound ridiculous ? What am I paying for if she wants the business name and taking some clients? I know this happens and clients will go where they want, I knew she was going to do nails mobile but I think for her to keep the business name is a joke- as this would mean all social media such as Facebook would still be hers- I wanted to have all these details as it will have the clients- or do you think I am being unreasonable? Bare in mind it's a lot of money that I am paying out for the business, I know she's spent a lot of time building the name and client base but this is what I'm paying for?!


Sorry for the long message but I'm really angry about this I feel she is taking the right mick and it's really putting me off getting it!! If anyone could give there thoughts I would really appreciate it

 

[KrisKross]

I'd walk away from this deal, because I can't see what you're actually buying apart from, presumably, the lease on a shop?

 

[LizzyS_]

I'd walk away from this deal, because I can't see what you're actually buying apart from, presumably, the lease on a shop?

Completely agree with this, all the advantages from buying an established shop u won't be getting. X

 

[Beckybee]

She's stripping the business away.

Normally when buying a business, you state that the seller cannot run a similar business within so many miles of the old business or cannot start a similar business for a certain amount of time after the sale.

It'll cost you just as much to create a new business from scratch with new equipment and warranties.

Walk away

 

[swilks12]

Whats your gut saying? I think in all honesty she is taking the p1ss out of you! Walk away and find a better prospect.

 

[AcidPerm]

What does your solicitor advise? You're paying them to give you their professional opinion so definitely use them.

 

[Leeloo]

Whats your gut saying? I think in all honesty she is taking the p1ss out of you! Walk away and find a better prospect.

This, so this!

It seems to me as if you're not getting any of the benefit of buying an established business (name, client base, equipment) so why bother? If it was me, I'd use the money that I was going to buy the business with to get my own place, equip it exactly as I wanted, with the equipment that I'd chosen and decorate it to my taste, rather than the taste of the person who was leaving.

If you're worried about money that you've already spent (solicitor, surveys etc) - google something called 'The Sunk Cost Fallacy', which is basically a posh way of saying don't throw more money at something just because you've already lost money on it.

 

[user 111574]

Hi,

This is something to discuss with your solicitor and go with their advice. That's what they are there for.
Perhaps you need to re-negotiate price as she's not including what she originally promised?

Firstly ask yourself - is this salon in the best location and size for what I want to do with it?
If the answer is "Yes" then pursue a new deal. If "No" then pull out and start again elsewhere.

Things to be aware of when you re-negotiate:

• Existing clients have no significant monetary value when buying/ selling a business however the names and addresses DO belong to the business and should be left for you to make use of. Of course you have no control over whether a client stays with the salon.
• Only take equipment that is in very good condition and that you will actually use.
• Do not take on other peoples loans or leases - way too much faff and risk. There could be unexpected debts to settle!
• You will probably want to re-decorate and fit out the salon in your own new salon so any furnishings she leaves will be of little value to you .
• Changing the name of the salon probably won't be too much of an issue if you are in the same place. Try to keep the same phone number if you can. Clients don't worry about name changes as much as we think!
• You should start your own new Facebook salon page so that you can advertise your services and not risk showing work of previous employees or products you don't use anymore.
• Taking on other peoples stock can be a real problem as you don't know its source or age. You may want new brands, treatments & retail stands anyway.

If it were me (and it's not...totally your decisions and thoughts) I would re-negotiate a lower figure and don't take any stock, equipment or sunbeds. She can get rid of these on ebay or somewhere. Insist though that she leaves the client data & telephone number for you. I would insist that she just clears the salon of everything. If she doesn't want to take things with her then they are probably old and not working - could just be extra trips to the local dump for you!

 

[xkayla_herex]

Ahh thank you all for your advice it's really helpful to have others opinions. This is something my solicitor will sort out but i definitely am going to walk away unless this is all changed to what we had previously agreed.

Thank you all again x

 

[RED STAR]

I think it's a 'tricky' one, taking over this sort of business.

The cost of the lease - to my mind, only really covers securing the premises for a set period of time.

We know in this industry, clients follow their stylist/therapist.
When they leave, the loyal client follows.

I know of a business near me, that are selling their lease to include the business....
50% of their clients will go with them.

Don't rely on the 'business', and if those clients remain, think of it as a bonus!

I would not take any stock....I paid over the odds for what turned out to be old tat!!!!

 

[xkayla_herex]

I just thought I would give you a update- so the seller has agreed to include all the equiptment, she felt really strongly about keeping the name as its personal to her (it's her actual name) and has now put forward about letting me keep the name for a set period (for me to choose how long- so I can get established) and then for me to change the name and her take it back. Do you think this is reasonable? Do u think there is something dodgey going on? She wants to do a few mobile clients on the side so I assume she will then use the name for her Mobile business. But as I am paying for this business do you think I should ask to knock of some money as I'm going to have to pay for change on shop front n new leaflets n vouchers stuff? Or should I put my foot down n say no she can't have the name?

 

[daydreams01]

I think if you agree to change name within first 3 months could you get her to make you admin for the existing Facebook page so that when you take over you can announce the salon is under new ownership and there will be some exciting changes introduced over the next few months. Then you can change the name on all the social media sites without having to lose all the likes and followers etc. Then obviously change all the security settings for the social media so that the old owner can no longer access it. Then set up a new website with new business name and details. I know of a salon near me that I was following that changed their name from the lounge to the salon. Not sure why they changed but they didn't lose any of their followers or reviews etc so it can be done.