[Tom-01]

Just home, booked another couple of jobs and Aworka tells me that the combined annual value of all our franchisees' rounds has just passed a quarter of a million quid.  Which is nice.  As of May 4th 2010, our total round value was zero.

The (virtual) beer's on me.

Vin

Thats good work Vin. Just shows what can be achieved.

A question for you, when your royalty turnover reaches the VAT threshold will you charge your royalty plus VAT to your franchisee, or swallow the VAT charge?

Thanks
Tom

[ascjim]

We are no way near that. I have 3 guys working for me and I stay at home all day.

[Tom-01]

Do you know how much hassle is involved in him getting 50k out of that lot,250ks worth of work is a lot of work to get. If I was told I would be on a grand a week for my efforts I would stay on my pole,fair play to you Vin for doing what you've done.

Yeah its a lot of customers to get, but all he has to do is get them - when you have processes in place and the work comes in its easier over time. Get the processes nailed and there's little work involved.

[Tom-01]

We are no way near that. I have 3 guys working for me and I stay at home all day.

How many vans have you got out?

[Walter Mitty]

Nicely done PW.  If I wore a hat, I'd take it off to you .
I had to smile because the turnover on my most recently submitted accounts was £xx,032.  Please note though, only five numbers - and I'm not saying what the first two were .

[Ian101]

brilliant Vin ... thanks to you and your advice I will be ready the end of this year to get franchise 1 in place ... was aiming for sooner but still need the income from my round ... good stuff 

[Perfect Windows]

Just home, booked another couple of jobs and Aworka tells me that the combined annual value of all our franchisees' rounds has just passed a quarter of a million quid.  Which is nice.  As of May 4th 2010, our total round value was zero.

The (virtual) beer's on me.

Vin

Thats good work Vin. Just shows what can be achieved.

A question for you, when your royalty turnover reaches the VAT threshold will you charge your royalty plus VAT to your franchisee, or swallow the VAT charge?

Thanks
Tom

We'll swallow it.  I think it would be an unreasonable increase to foist on the franchisees - it's not their fault. 

It basically means there's going to be a franchisee (not sure which one) who doesn't make us a penny.  The plan is to get close to the VAT limit, build up a chunk of capital to see us through then grow through the limit as fast as we can.  The aim is to set up to recruit two new franchisees a year, so it'll be half a year's growth purely for the government's benefit.  Once we've done it and worked through the initial registration year pain it'll just be a mild embuggerance.

It's something of a shame that VAT doesn't work a little more like income tax, whereby you pay on the amount by which you exceed the threshold.  If it was that way it would blend in the VAT a little more gently.  I can see reasons why that would be difficult but it would stop the daft situation we're in with people hovering just below the limit for years.

Vin

[Matt.]

We'll done vin.

I work all day every day and av never turned over that much in a year, one day al hit that quarter of a million mark tho ........ One day, just not yet tho 

If you posted saying u was looking for work and struggling for money more people would be sympathetic with there posts. It just seems that if post suton wanting to share your good experience and let others who are interested know how things are goin, it turns a lot of peoples eyes green .......

Keep goin vin

[Dave Willis]

Good work Vin, I'm curious though - what's the connection with Franky? He must be at least ninety miles away from you.

[Tom-01]

Just home, booked another couple of jobs and Aworka tells me that the combined annual value of all our franchisees' rounds has just passed a quarter of a million quid.  Which is nice.  As of May 4th 2010, our total round value was zero.

The (virtual) beer's on me.

Vin

Thats good work Vin. Just shows what can be achieved.

A question for you, when your royalty turnover reaches the VAT threshold will you charge your royalty plus VAT to your franchisee, or swallow the VAT charge?

Thanks
Tom

We'll swallow it.  I think it would be an unreasonable increase to foist on the franchisees - it's not their fault. 

It basically means there's going to be a franchisee (not sure which one) who doesn't make us a penny.  The plan is to get close to the VAT limit, build up a chunk of capital to see us through then grow through the limit as fast as we can.  The aim is to set up to recruit two new franchisees a year, so it'll be half a year's growth purely for the government's benefit.  Once we've done it and worked through the initial registration year pain it'll just be a mild embuggerance.

It's something of a shame that VAT doesn't work a little more like income tax, whereby you pay on the amount by which you exceed the threshold.  If it was that way it would blend in the VAT a little more gently.  I can see reasons why that would be difficult but it would stop the daft situation we're in with people hovering just below the limit for years.

Vin

That would do my head in, but I agree its not worth charging the franchisee.

Will you pay 12% or 20%?

What royalty percentage do you take from the franchisee?

Thanks
Tom

[robbo333]

Which one of them is cleaning the £32.00 

Well, since I have handed over the lion's share of my work and kept the underpriced tripe,  it'll be me.  I do have a piddling flat that's £8 twelve-weekly so that'll be the one.

Vin

Fair play to you. I'm sure you've worked very hard to get to the 250.
I think it's great that you've shared this post, it shows what can be achieved if you've got the determination. Very inspiring.
Good luck with the next 250.
Robbo

[Walter Mitty]

Just home, booked another couple of jobs and Aworka tells me that the combined annual value of all our franchisees' rounds has just passed a quarter of a million quid.  Which is nice.  As of May 4th 2010, our total round value was zero.

The (virtual) beer's on me.

Vin

Thats good work Vin. Just shows what can be achieved.

A question for you, when your royalty turnover reaches the VAT threshold will you charge your royalty plus VAT to your franchisee, or swallow the VAT charge?

Thanks
Tom

We'll swallow it.  I think it would be an unreasonable increase to foist on the franchisees - it's not their fault. 

It basically means there's going to be a franchisee (not sure which one) who doesn't make us a penny.  The plan is to get close to the VAT limit, build up a chunk of capital to see us through then grow through the limit as fast as we can.  The aim is to set up to recruit two new franchisees a year, so it'll be half a year's growth purely for the government's benefit.  Once we've done it and worked through the initial registration year pain it'll just be a mild embuggerance.

It's something of a shame that VAT doesn't work a little more like income tax, whereby you pay on the amount by which you exceed the threshold.  If it was that way it would blend in the VAT a little more gently.  I can see reasons why that would be difficult but it would stop the daft situation we're in with people hovering just below the limit for years.

Vin

That would do my head in, but I agree its not worth charging the franchisee.

Will you pay 12% or 20%?

What royalty percentage do you take from the franchisee?

Thanks
Tom

I'm sure PW will correct me if I'm wrong, but I think he's already gone past the point where the simpified VAT (12%?) is an option.

[Perfect Windows]

That would do my head in, but I agree its not worth charging the franchisee.

Will you pay 12% or 20%?

What royalty percentage do you take from the franchisee?

Thanks
Tom

We'll go on the flat rate as long as we can.

Royalty is 20%.

I'm sure PW will correct me if I'm wrong, but I think he's already gone past the point where the simpified VAT (12%?) is an option.

The number quoted is the sum of all the franchisees.

My VAT calculation is based on royalties received and the cleans I still do, so is much lower than £250K (and is currently below the VAT limit).  The franchisees' turnover won't exceed the limit so they won't need to charge VAT.  Hope that makes sense.

Vin

[tlwcs]

Well done Vin,  love what you've built in 5 years.
Tony

[Tom-01]

That would do my head in, but I agree its not worth charging the franchisee.

Will you pay 12% or 20%?

What royalty percentage do you take from the franchisee?

Thanks
Tom

We'll go on the flat rate as long as we can.

Royalty is 20%.

I'm sure PW will correct me if I'm wrong, but I think he's already gone past the point where the simpified VAT (12%?) is an option.

The number quoted is the sum of all the franchisees.

My VAT calculation is based on royalties received and the cleans I still do, so is much lower than £250K (and is currently below the VAT limit).  The franchisees' turnover won't exceed the limit so they won't need to charge VAT.  Hope that makes sense.

Vin

You don't have to lump your turnover with the franchisee royalties though. A franchise business is totally different to you as a window cleaning business.

Just thinking about things, say total royalties is £100,000. Minus 12% = £88,000. Say £5000 expenses (could be more as not sure what you spend marketing etc or if franchisee payment covers that) So thats £83,000. Deduct corporation tax at 20% leaves approx £66,000. Its still good money for not having to do the work, but its not a lot compared to the value of the work.

I'm still undecided which route to go down. Hopefully you've got a kettle in your office Vin as I might have to visit you for a chat one day 

[johnwillan]

Hi Tom-01

Not sure the VAT man would see it that way.

The franchise is a business model of the round Vin operates, I imagine at the very least his round which uses the same branding/systems etc would probably need to pay the royalty too, it would certainly be an interesting case, unfortunately if lost there would have a substantial bill for previous years undeclared.

I've spoken with various Tax specialists on this subject and like always their opinions vary dramatically from "yes thats fine" to "no it's not".

Be interested to hear what others think.

John





 

[johnwillan]

Well done Vin, onwards and upwards

[Shane sharples]

Well done vin that's awesome 👍

[Perfect Windows]

You don't have to lump your turnover with the franchisee royalties though. A franchise business is totally different to you as a window cleaning business.

Just thinking about things, say total royalties is £100,000. Minus 12% = £88,000. Say £5000 expenses (could be more as not sure what you spend marketing etc or if franchisee payment covers that) So thats £83,000. Deduct corporation tax at 20% leaves approx £66,000. Its still good money for not having to do the work, but its not a lot compared to the value of the work.

I'm still undecided which route to go down. Hopefully you've got a kettle in your office Vin as I might have to visit you for a chat one day 

Theoretically I could run window cleaning and franchise business separately for VAT.  However, having spoken to a VAT consultant, I found that what looks simple isn't.  The businesses would have to be separate enough that they'd need different broadband accounts, PCs, even stationery (down to pens). 

Then he mentioned case law that meant that if I were out cleaning and a franchisee in the next road needed a spare part, I'd need to drive home, swap to my car, drive out with a part that wasn't the one on my van, drive home, get into the van and return to my clean (there was a case involving a plumbing company that separated domestic from commercial that hinged on this very situation).  If it's that hard to keep them separate, it's not worth it.

I'm not concerned about how little I appear to make given the amount being turned over by the franchisees.  Not even slightly.  Franchising works because the franchisees take the lion's share of the cash.  You end up with capable, reliable people who want to do a good job for their business.  I wouldn't swap that for a gold pig.

Kettle's always on.

Vin

[Ian.M]

Well done Vin, always nice to read good news! Keep up the good work!