Investing in a massage shop

[johnnyk]

The biggest mistake made by some falangs when they buy a bar (or massage parlor in
this case):
I'll drink and shag for free.
These guys are usually back home in 6 months, perusing the "help wanted" ads.

[Dannie Boy]

A friend is considering buying out a partner in a massage shop in the tourist area, mostly for fun but possibly for a return on his investment and has some questions which I can't answer. Maybe the forum can help? The outlay is 70,000 thb. Not too much to lose. Because he's a foreigner the shop will be solely in the remaining partner's name. She's happy because there is some tension between the partners and she wants to buy her out. My friend is the willing patsy.

1. Can he insist that the day's takings are banked daily?

2. Can he protect/secure his investment in any way, for instance using a Thai proxy, which should leave him the the option of being bought out himself at a later date? Or does he just have to write it off?

3. What is the process for transfer of partnership?

Any other sensible thoughts appreciated.

Has any of the advice helped you/your friend Calvin?

[Calvin]

He's going to the shop today to see if the existing arrangement works financially. He's well off and it's play money to him. Will report on the outcome, if anyone is interested. Thanks for the advice.

[SunandFun]

He's going to the shop today to see if the existing arrangement works financially. He's well off and it's play money to him. Will report on the outcome, if anyone is interested. Thanks for the advice.

I think you can see from all the replies and comments we want to know how it works out. We all have that inner curiosity about doing this. So please keep us posted and we will enjoy living our dreams through his!

[Calvin]

Ok. We have a Thai nominee lined up and have requested a signed legal agreement setting out the relationship. I've asked a businessman friend whether it's worth the paper it is written on. He said yes.

So, it is off to a lawyer to draw up the document. Anyone know the typical charge for this?

[tuppence]

I think the lawyer fee is 70,000 baht

[MrPlum]

Do a search for 'sample partnership agreements' and download/draft your own. Here's some tips... http://www.wikihow.com/Write-a-Partnership-Agreement

This link has a template which you can use for ideas and/or download... http://www.entrepreneur.com/formnet/form/901

A critical clause is one which says... 'the new partner shall not be liable for any debts run up by the existing one'. Or words to that effect.

I don't see the need for a lawyer except as a credible witness, if the agreement is simple, which in this case, it is. Certainly I would make your witness someone of standing, perhaps a Police Colonel or similar. A free round of golf should do it. That should encourage the existing partner to play fair.

There must be others on the forum who know about this kind of thing. Come on. Best foot forward.

[Dannie Boy]

Do a search for 'sample partnership agreements' and download/draft your own. Here's some tips... http://www.wikihow.com/Write-a-Partnership-Agreement

This link has a template which you can use for ideas and/or download... http://www.entrepreneur.com/formnet/form/901

A critical clause is one which says... 'the new partner shall not be liable for any debts run up by the existing one'. Or words to that effect.

I don't see the need for a lawyer except as a credible witness, if the agreement is simple, which in this case, it is. Certainly I would make your witness someone of standing, perhaps a Police Colonel or similar. A free round of golf should do it. That should encourage the existing partner to play fair.

There must be others on the forum who know about this kind of thing. Come on. Best foot forward.

My concern would be that this is Thailand and if you ever got into a dispute, I'm pretty certain that the courts would only recognise an agreement written in Thai, not English.

[dtaai-maai]

I'm not a businessman, but my twopennyworth is that if I was sufficiently worried about a 70k baht 'investment' in a massage parlour to want to spend - what - 5k? 7? 10k? or whatever, on a lawyer to write up an agreement, I probably wouldn't make the investment at all.

If it all goes pear-shaped, the money is gone, contract or no.

[Calvin]

Actually, it isn't just 70k. The shop had 10 customers yesterday. 3 on a slow day. Let's say 5 daily @ 300thb each. That's 40k per month. Just in low season (before costs). 10/20/30k a month each, net. While my friend has stumped up the deposit, guess who is getting the revenue?

I don't need to golf with a policeman, MrPlum but thanks for the ideas. My wife is friendly with a Thai big-wig, who can witness the signature. She will be a sleeping partner, unless something goes wrong and receive her share of the monthly income into her account. Legally it's a Thai-Thai partnership agreement. Far from being an easy falang rip-off opportunity, a buy-out clause in the agreement could see my wife take sole owner of the shop, if the existing partner plays silly buggers.

My friend helps out a lady in distress, gives my wife some income and all being well gets VIP treatment when he comes on holiday. His initial outlay could be paid back in as little as 3 months but I know he'll tell me to keep it. The existing partner gets rid of a serious headache, has the security and convenience of being backed by a hands off partner and keeps all tips and extras, which could be significant.

It's an interesting game for only a small outlay. Don't you think it's worth trying?

[dtaai-maai]

Actually, it isn't just 70k. The shop had 10 customers yesterday. 3 on a slow day. Let's say 5 daily @ 300thb each. That's 40k per month. Just in low season (before costs). 10/20/30k a month each, net. While my friend has stumped up the deposit, guess who is getting the revenue?

40k doesn't sound like a very large sum in terms of gross takings for a business with at least 3(?) partners hoping to get a return on their investment. Are there no overheads?

An investment like this (like all investments, I suppose) is obviously a gamble, and you should never gamble what you can't afford to lose. If this is really play money, then good luck to him/you/her/whoever...

[MrPlum]

40k doesn't sound like a very large sum in terms of gross takings for a business with at least 3(?) partners hoping to get a return on their investment. Are there no overheads?

I think that's for advertised services and from the OP there will be only 2 partners. I've read elsewhere on the forum that some 'generous' customers pay up to 2000 thb for extras. 100,000k+ per month gross would be more realistic. Does a % of the 'extras' go to the shop or do the ladies keep it all? Can't see his wife being entitled to any of it but you never know.

I'd also check whose name the rent is in. Is the leaving partner leaving willingly or nursing a grudge? That kind of thing can throw a serious spanner in the works. The other consideration for me would be competition in the area. HH seems to be crawling with massage shops. I don't know how they make money. Obviously some do.

Good luck with this. I'd probably do this myself just for fun. Beats selling car insurance. Do you need some herbs? Organic Coconut oil? Where is it? I'm curious.

[Dannie Boy]

Actually, it isn't just 70k. The shop had 10 customers yesterday. 3 on a slow day. Let's say 5 daily @ 300thb each. That's 40k per month. Just in low season (before costs). 10/20/30k a month each, net. While my friend has stumped up the deposit, guess who is getting the revenue?

I don't need to golf with a policeman, MrPlum but thanks for the ideas. My wife is friendly with a Thai big-wig, who can witness the signature. She will be a sleeping partner, unless something goes wrong and receive her share of the monthly income into her account. Legally it's a Thai-Thai partnership agreement. Far from being an easy falang rip-off opportunity, a buy-out clause in the agreement could see my wife take sole owner of the shop, if the existing partner plays silly buggers.

My friend helps out a lady in distress, gives my wife some income and all being well gets VIP treatment when he comes on holiday. His initial outlay could be paid back in as little as 3 months but I know he'll tell me to keep it. The existing partner gets rid of a serious headache, has the security and convenience of being backed by a hands off partner and keeps all tips and extras, which could be significant.

It's an interesting game for only a small outlay. Don't you think it's worth trying?

Based on what you have said here, I'm surprised you need to ask whether its worth taking a gamble?

[Scotian2012]

IMHO, does not sound like a good arrangement - rent is high - I just closed a massage shop with rent at 40K because income not covering expenses

[Takiap]

40k doesn't sound like a very large sum in terms of gross takings for a business with at least 3(?) partners hoping to get a return on their investment. Are there no overheads?

I think that's for advertised services and from the OP there will be only 2 partners. I've read elsewhere on the forum that some 'generous' customers pay up to 2000 thb for extras. 100,000k+ per month gross would be more realistic. Does a % of the 'extras' go to the shop or do the ladies keep it all? Can't see his wife being entitled to any of it but you never know.

I'd also check whose name the rent is in. Is the leaving partner leaving willingly or nursing a grudge? That kind of thing can throw a serious spanner in the works. The other consideration for me would be competition in the area. HH seems to be crawling with massage shops. I don't know how they make money. Obviously some do.

Good luck with this. I'd probably do this myself just for fun. Beats selling car insurance. Do you need some herbs? Organic Coconut oil? Where is it? I'm curious.

..........or some fresh eggs for doing facials.


Jokes aside........I'd probably go for it as well. Even if things don't work out, it's not a huge loss anyway.