Taking over a small franchise

[Carouselfish]

Hi, my employer wants to retire and give (no cost) me their franchise. It's only little and I already do the recruitment and day to day running. However, I am really poor. I don't have savings. I don't know whether the business is profitable or if she's subsidising it with her other.busineses (which she is also giving up).

So, can you please help with what questions I need to ask her, what I need to consider before making a decision?

Sorry if I'm using wrong terminology but prepared for a steep learning curve.

OK, but why?

Oh and to add, the alternative is we close it down, so I'd lose one of my two sources of income.

Does she put any money in to the business, or do all the costs get paid by income?
Would you need a float of money to manage costs until you get paid by customers?
Would you need to buy any equipment, insurance, hiring space?
If it didn't work out, would you incur any costs in closing the business?
Does she have a business bank account? Would you take this over, or open your own?
Without knowing what the franchise is, some of these questions may be irrelevant!

Have a look at the accounts. Find a small business adviser- local authority etc to advise.

I guess the main question is what do you do if it doesn't work out - can you just stop operating and walk away, or would there be more work or costs to wind it up?

@Hopelesslydevoted2Gu excellent things to ask.

@I could but hoping to get ideas from you guys first. I'd go to one of those if I was to take it on.

Is it profitable or not? Check the accounts

Why? You don't know whether the business is profitable or not.

Is the business a Ltd company, or a sole trader or what? Does it have any assets or debts, and what about the franchise contract - who with, how much, for how long, and what are the get-out clauses? The fact that she wants to offload it to you for free is a bit concerning to be honest.

What costs are associated with the business - insurance, overheads, website/IT costs, and all the rest?

Are you currently an employee? If so, and the business is closing, if you've been there long enough you should be entitled to a redundancy payment. Take on a worthless franchise and you will get nothing.

You really need to do a considerable amount of homework before committing yourself to anything.

Asking you guys is part of me asking questions. I'm asking for ideas on what I should ask. I'm not saying I'm going to do it. I just want to know what I should be looking into.

Redundancy pay not worth much.

Get out clause is a good pointer.

Boss is also saying she'd mentor me so don't think she's thinking of it as a con.