Hey all Andrew Hawkes here again,

seriously though...  who else could it be? lol Sorry just having a little joke with myself.

So my last post was about me and my story... and it kind of left off leaving you hanging a little. So today let me try and fill in some of the gaps that were left.

Right I left off mentioning that I was also involved in a Franchise Hair Salon. I guess I want to start this by saying that you really should investigate and carry out a thorough due diligence on a business before making a solid decision. We made a decision based on  a franchisors word and projections he threw together. If your franchisor or the person you are buying an existing business off cannot provide you with timely accurate figures for the business in question WALK RUN AWAY. Normally I myself would have walked away... however this case was different. My wife had been managing one of his franchises in another part of town in another mall. I had seen what the weekly figures were that these salons were doing, and of course given that my wife was working for the franchisor previously we had every reason to trust him and really none not to. And also at the end of the day we made the decision to move forward and get involved with the salon.

Now I am not sure if you have ever heard the term about how life or rather the universe will tell you when things aren't right, they will give you signs, they are likened to a feather, a brick, and then finally a truck. Meaning of course that the signs get stronger and stronger until you can no longer ignore that there is an issue. Oh, BTW the by the time the truck comes you are pretty much f**ked (excuse my french)

So here is the feather;

Our settlement date for the Salon, i.e. the salon was supposed to be finished so that we could start trading, was the 12 of October. The date we actually settled (as construction took a lot longer than implied) was the 22nd of November. At this stage, we should have, and would have been well within our rights to, cancel the contract on the salon purchase, we would have received our deposit back, and would have forgone the even greater debt we were about to get ourselves in. Given my nature, of always trying to do the right thing by other people... I felt we were obligated to stay in the contract and see it through. This turned out to be a massive mistake.

OK so here now is the Brick;

We were fast approaching settlement (and we still could have canceled) and our finance fell through. New Zealand was going through a major rut of finance companies falling over left right and center and even though under normal circumstances our applications for finance did stack up... we were no longer in normal circumstances. Top this off with the fact that my mother in-law, who lived in a different country, had just been diagnosed with a terminal illness, this really should have been (and was we just didn't want to see it) our second warning and the one in which we walked away. Instead, driven by my needing to do right by everybody else we carried on.

I'll get to the Truck in a minute.

We settled the deal... how? Well our friendly franchisor offered to provide vendor finance so that we were able to make settlement and to be able to trade. He was in as bad a spot as us really. He wanted someone to run the salon and didn't have the time to do it himself. We actually thought this was a good thing. Now as part of the vendor finance deal there were certain caveats as to what we were and what we were not allowed to do within our own business. He was, by rights,  protecting his asset. In the same position I would have done the same... I may have been a little more realistic with my demands, however that is not what this is about.

One of the caveats that was placed upon us was that we were only able to draw a certain amount from the business each week, which was basically less than what Sarah was getting while she was earning wages. Now I was not in a very good frame of mind money wise with the fall out of the cafe and the fact that my property trading had taken a hit due to my investment in the said cafe. All I could think of was keeping a clear credit rating so as to be able to continue in my primary business. So I worked out a way to get around the caveats placed upon us... we were allowed to pay contractors... So I contracted my services to the salon. This is all very legal and totally above board. In hindsight however it was not the best or smartest move I had ever made. I was fighting a losing battle with my credit rating, and I would have been better to take the hit then... again this is another one of those hindsight moments. The fact the I had contracted my services to the salon would come to back to haunt me in the eventual demise and sale (this is in italics as it was not really a sale, just enough for the franchisor to get his money back, and NOTHING else) of our salon.

The way it came back to haunt me was by the franchisors wife informing our staff (who were paid everything accept their holiday pay)  that I had stolen from the business. Which was a blatant lie. Now was I responsible for her saying that... you bet, so I am not sending any negativity her way. I believe in karma...

Right so here is the brick;

What started the eventual lead up to the resale of the business back to the franchisor was really two things. The franchisor took a disliking to our accountant, now at the time we were unaware as to why... and to be fair what I am about to say is a little speculative, however our lawyer agreed, it was due to the fact that our accountant was started to smell a rat, and the rat looked a little like our franchisor. This is something that we ourselves should have and would have seen if we had looked through business eyes instead of emotional ones.

Once this dislike was totally apparent, things really started to change (now of course this may just be my perception). Our franchisor had always maintained that he had a great relationship with all of our suppliers, and he did, they did exactly what he told or asked them to do. It was not long before we were put on stop credit with little to no chance to prove that we would be able to trade our way out the situation that we, and only we, had gotten ourselves into.

So what did all this mean? Well it meant that we were neck deep in the kaka. All thanks to decisions we had made. I had let my property business lapse, we had 3 mortgages to pay, solicitors fees, accountants fees, and top all of this off with creditors from not one, but two business I no longer had. And now, there was no income coming in. What happened next was entirely of our own doing... no one ever forced us to make any decisions, no one ever put guns to our heads. And all of the bother we were in came down to the choices we made. rightly or wrongly we made them...

And once again, I am looking at the length of this and realise that I have written enough for one day...  so I will complete this picture tomorrow.

Once again this is Andrew Hawkes signing off, and until next time,

Ignite Your Passion

About the Author

Andrew Hawkes is an Entrepreneur that has had good times and bad, he draws on all the experiences that he has had, military and in business, to provide solid information that anyone can use and understand to improve the results in thier own life and therefore show others to imrpove thiers. He believes that anyone can make a difference in the world and that ultimately anything is possible.