That's it for the evening
Was working on some stuff at home. Since I was near the kitchen all afternoon, I made
pot roast, a few ounces of which are resting comfortably in my belly. Off to the DaveCave(tm) to check email and then an early bed.
I will be starting work at the new potential business again at 7AM -- still waiting to hear the other person's plans but getting trained regardless.
Basically, a few years ago, some friends of ours were trying to start up a bakery. They had the property and a lot of the equipment but the County hit them with a stiff septic requirement and they could not afford it.
My Mom had passed away a few months prior and we had sold their Seattle house and moved my Dad into a condo in Bellingham so there was some money available. Even back in 2007, I could see the banks teetering on the precipice and knew the housing market was set to crash so I put the funds into commercial real estate and the store.
I made several loans to these people to the tune of $60K. They had a real passion for what they were attempting, both had managed restaurants before and I felt they were qualified.
Things ran great for a year. Then they started loosing key employees. Quality control went downhill fast (portion size, preparation, etc...)
Last year, they started accumulating tax debt. Checks started bouncing (including Payroll). The place was off the rails. One of the partners was a control freak and in denial about the conditions of the bakery so any offers were emotionally refused.
Finally, a few weeks ago -- during the slow season -- they closed weekdays. They moved to a different town. I started talking to the other partner and they said that the bakery was up for sale at a ridiculously low price - the cost of the land and building, nothing more.
I offered to step in an manage the place -- out of the original price, I would get my loan repaid. If I was able to sell the business for, say, $100K more, they would get the additional $66K and I would get $33K.
To keep things interesting, a local friend of mine has been in the food service industry for 20 years and has cooked at a number of Bellingham's iconic restaurants. He said that he was interested in purchasing the bakery.
Considering that I have zero interest in owning a food service business, I immediately promoted him to Plan A and me to Plan B.
I hope that he is able to get the funding and county approval for the changes he wants to make but if he cannot, I need to be able to step in and run the place.
To top it off, the other two restaurants in Maple Falls are also going through management changes. Interesting times...
Posted by DaveH at October 14, 2010 8:13 PM