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£7,000 good will!!!

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Marilyn Monroe

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is this normal?
so lets start i've been on my travels today looking for empty shops and found one which used to be a pound shop sort of thing, he has moved about 5 doors up to a bigger shop, so i asked if he was letting the old one and he said yes£125 per week. great i think....:green:

then he says plus£7,000 good will,:cry: now to my knowledge and it seems this is wrong but i always thought good will was i.e if i had taken a salon i pay goodwill for the clients as the business is already established.

so what is this man wanting good will for i dont want hisbusiness and he wouldnt be selling his buisness customers anyway as he has only moved so they would go there to him. :irked:
 

sodabubble

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I think he's having a laugh! is the shop empty?
 

Marilyn Monroe

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i'm glad it's not me who has lost their business head!!

yes he sed i can have the shop fixtures but i obviously dont need them, but they're certainly not worth 7,000! there are a few shelves on the wall n one in the centre n he just put everything in baskets on them and all over the floor.
 

michelle g

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i totally agree he either wants to let it or he doesn't.
does he actually own the shop?
 

sodabubble

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oooooh I feel like him up pretending to be interested and then asking him what exactly this goodwill is for? Its not as tho he is a nail tech or therapist or stylist, so what is he on about? He must think you're as divvy as him! (which I am sure you're not, no offence hun lol xx)
 

Marilyn Monroe

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i'm soglad u all agree, i was starting to doubt my business skills. well ithink ill look else where.
 

pure

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Whether or not he calls it 'good will' I don't know.:rolleyes: But I do know that when business premises are let there is often a large lump sum payment as well as a rent. This is fairly common business practice.

Does he own the premises?
 

sodabubble

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dont blame ya gal! It sounds to me like he has heard the term 'goodwill' and decided he can apply it with this shop! He'll never let it out at this rate cos everyone will question him! flaming eejit!
 

rouge

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Whether or not he calls it 'good will' I don't know.:rolleyes: But I do know that when business premises are let there is often a large lump sum payment as well as a rent. This is fairly common business practice.

Does he own the premises?
I've never heard of that one. What is the lump sum payment for? I ask because my colleague is looking for premises at the mo and I don't want her to have something like this sprung on her!
 

Katelisa

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well £125 a week sounds very little for a shop... maybe its half lump sum and half monthly, that would take it to approx 14k, which sound more feasable.
 

Marilyn Monroe

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i've let a shop before n i did have a lump sum to pay as a bond which was one month rent, but i got this back when i stopped letting from him.


this guyis just trying to rob me.

i'm getting a little dis-hartened as i'm not getting anywhere with my property search.
 

oey

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I thought good will was a payment to cover the cost of a client base that has already been built up by the previous business. If it wasnt in the same line of business as you are going into then I dont think it can be classed as good will. I would wont to know exactly what it is for as I think he is trying to pull a fast one.
 

Little Angel

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HI

Maybe he means for the lease?? If he has been leasing it??

Or if he owns it it could be a bond to make sure you dont leave it in a mess???

I should ask him, make sure you check out that he legally owns the premises before you do anything though, because to sublet he will need the owners permision..................i am pretty sure, check it out hun best of luck xx
 

Marilyn Monroe

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thats alot! for this area £125 is average price to let per week, my old shop was also £125 2mins walk away and the bond was £500
 

marioned

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I've heard of "goodwill" too.

Usually it is if you are going to take over a shop, let's say a newsagent, but it can apply to any. You pay the rent as agreed, then you pay for the stock as valued. then you pay a lumpsum as "goodwill". This is not a refundable amount (any refundable bond for future damages when you give up the lease would I guess be in addition to the above). The "goodwill" amount is for the other owner creating the business, building up the client base, handing it over to you, putting you in touch with their suppliers/clients, giving you a rundown on how to do things, etc.

Obviously in this case there is probably very little "goodwill" items that would be of interest to you. You don't want the fittings (such as they are), his uppliers etc are of no interest to you, his customers are going with him to his new store, etc.

I think he's trying it on. Why not point all this out to him and see what he says. He may increase the rent to cover what he feels is his "loss", or may accept what you say when he realises no one is interested, or he may hang on, hoping that someone will be such a business "newbie" that they shell out.

Don't burn your bridges with him. Just explain what you feel, and if he doesn't take you up on it, leave your name and number with him in case he wants to get back to you with a better offer.

Best of luck whatever you do!
Marion xx
 

pure

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I've never heard of that one. What is the lump sum payment for? I ask because my colleague is looking for premises at the mo and I don't want her to have something like this sprung on her!
Apparently it's called 'key money' and is a fairly common practice either privately or through a letting agent. Sounds like a rip off to me but there we are!:rolleyes:
 

tinkywinky

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I'd tell him where he can stick his goodwill lol!! :smack: cheeky thing!

£7000 for what???

My feeling: why don't you set up a home salon - much cheaper, easier you can work evenings then and don't have to pay £7K for god knows what!!
 

Urban Geek

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Goodwill payments are often asked for if a property is in a very prime position. Sometimes in those circumstances it can be worth it if the location is particularly sought after and if empty properties don't arise very often.
 

hippy-chick

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Why not call his bluff and say you are ready to take over on ...Date. No goodwill money.
He might just snap you up. Next time you go and visit him, make sure you have a few other property details conviently popping out of your file!
 

mrs o

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Years ago( 19) i paid Goodwill-aka Key money for the remainder of a lease ,on a shop.( 2 years 9 mths)
It was a building society,and i wanted it for a salon.They said it was to cover costs of changing the lease over etc.It was common enough in those days-so i paid.However i still paid solicitor bills to change the lease into my name.

A few years later i moved and the new landlord wanted key money.I phoned my solicitor and she said it was illegal and not to pay,now i really really wanted these premises ,but i told the landlord that i was prepared to move in immediately and i had references BUT would not be willing to pay Goodwill or Key money.He agreed.
If you think that the location of this shop is perfect and the size etc then you should try to negotiate with the owner,but dont bother wasting his time and yours if you are not that interested.
If he has an empty shop that is costing him money every week,of course he will be willing to talk to you.
 

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