Secure wait help before buying fast-food franchise

Dear Bruce: I am considering buying a fast-food franchise currently in operation. I understand through the grapevine that the place is for sale because the current operator is going crazy trying to find counter and kitchen help. It’s hard for me to believe there isn’t a sufficient number of high-school and college students available for these jobs. If it’s serious enough for him to consider selling, should I consider buying? – T.S., via e-mail

Dear T.S.: I am involved in an enterprise where we employ many young people, and I can tell you it’s like pulling teeth out of a giraffe.

While I suspect the low unemployment rate is good for the economy, candidates for the lower-paying jobs are so much in demand they can pick and choose. It seems these types of employees only work a short time, particularly if they are able to save a little money. While I don’t know if this is a reason to go out of business, I would hope you and your spouse (if you are married) are resilient enough to put in 15 or 18 hours a day. Otherwise, I wouldn’t buy this operation, even though it could be very profitable.

Modest payment may secure sole ownership

Dear Bruce: We are 50 percent owners of a family business. In the near future, we may be given the opportunity to buy the other 50 percent. Do you know how we can investigate a reasonable buyout amount or what an existing business is actually worth? The business brought in around $230,000 in gross revenue last year. We lease the building, so there is no real estate involved. There is about $20,000 in equipment as assets and a debt of around $65,000. – Reader, via e-mail

Dear Reader: It pains me to tell people their enterprises have little value, but nothing would be served by letting you believe otherwise. The business grossed less than $250,000; you have a very small amount of physical assets and a debt of around $65,000. What are the partners taking out of this business? It can’t be very important money, given the relative modest gross.

A very modest payment to your partners would be more than generous, assuming you pick up the debt and the lenders will allow the other family members to get off the hook.

Rollover helps freelance worker track retirement funds

Dear Bruce: I am a freelance employee and I have several different 401(k)s. Is it better to put them all in a rollover individual retirement account?

I know we should diversify, but is it OK to have all of one’s money in different funds within the same mutual-fund company? – W.M., via e-mail

Dear W.M.: On balance, it would be easier to keep track of things having them all in one rollover account. You can diversify and you can choose different funds within one company.

With a substantial amount of money, I would be more comfortable having two or three mutual-fund companies and further diversify by selecting perhaps two funds within the same label.

Post-business payoff settlement a good option

Dear Bruce: I’ll make this as short as possible. I have some bad credit. I owned a business and fell behind on some payments. I sold the business and continued to pay down all debts. We have paid off many of them and have a few to go. I feel since I created the debts I should pay them off. I have a collection company that I have been paying for three years, each month at least $200.

They offered me a settlement, and I would be willing to take it, but I also have been working on building credit. They were unable to say how this would help or hinder my credit score.

Can you give me a little help? – S.F., via e-mail

Dear S.F.: First of all, let me commend you for your honesty in handling the debts the way you are. Many people would just run.

As to the settlement, forget about credit. If they are offering you a decent settlement and you can afford to pay it, I would jump at it. If you’re in collection, your credit will take a long time to build back up anyway.

The last thing I would be worrying about is the effect on your credit rating; think about the effect on your purse.

Chances are they will settle for something on the order of 40 cents to 50 cents on the dollar or less. I would negotiate the best deal possible.

Again, congratulations on the honorable way in which you have handled your affairs.

Bruce Williams is a national radio talk show host and syndicated columnist. He can be reached at bruce@brucewilliams.com.[[In-content Ad]]