Dissolving the partnership

July 16, 2004

I started a new company called Auto Mall Tint Factory last May with a friend of mine who said he needed a change from what he was doing. He was in the alarm and stereo business for about 20 years and got kind of burnt out. I told him I didn't want a partner as an investor but a tinter who would like to own part of the business and profit from it. He went to tint school and afterwards told me he could do it. I went against my better judgement and gave him the opportunity.

Well, after 14 months, he still hasn't even mastered tinting the side rollup windows. It is very frustrating watching him take about an hour per rollup window. I guess there are some things that people just are not cut out to do. Tinting is not for everyone and I was sure hoping that he would pick it up. It isn't my fault that he is a slow learner but I can't hold his hand forever.

I am burnt out because I am carrying 90 percent of the load running this business. All he does is come in and answer phones, deal with the customers when they come in, help take off door panels and tint a few easy windows here and there. I do the paperwork for the business, pay the bills, design the website, answer e-mails, do the taxes, putting my 16 years of experience on the line, tinting the majority of the cars and end up splitting profits with him for what? I could have just hired a high school kid and pay him $10 per hour to help me do what he does.

When it comes down to jobs with Huper Optik ceramic tinting, I end up doing the entire car without his help. At the end, he gets his cut for doing nothing. I asked him to see if he wanted to start installing alarms at the shop so he can make some more money and he was kind of against it and was giving me alot of reasons why we shouldn't. I felt that with 20 years of experience and all those tools in those huge tool boxes, that it would be easy money for him. Maybe he just didn't want to do alarm installs because he knows that I won't be helping him out and that he would have to split the profits with me at the end.

So now here comes the semi-ugly part of trying to buy him out. He talked to his accountant friend and asked him what it would take for me to buy him out given some of the numbers that we did last year and the amount was $50,000. I told him that his accountant friend was crazy. If I could sell the entire business for $50,000 after putting in 14 months of work, I would do so in a heartbeat. I asked him one simple question. If this business is worth that much only for your share of it, I would gladly sell my part of the business for you for $5,000 to get back what I have in inventory. He was speachless. The bottom line is, without a good tinter, YOU HAVE NOTHING! If I was an employee of this company and if I was included in the sale of this company, than this business might be worth $50,000 because I will be able to generate more than that from tinting.

He also asked his friend about the name of the company and that I should not use that name anymore. The big problem is I just put in an ad in the yellow pages and am obligated to run it for a year. Also the bank account is under that name as well as the credit card charges forwarded to that account. There is alot of paperwork involved to change the name so I asked if I could keep it. He is thinking about it right now but if he asks me to buy it from him, I am going to tell him to f'off.

Right now I have added up all the inventory, office equipment, supplies, tools, money in our bank account, etc and was going to give him his 45% share to buy him out. I told him that basically if he does not accept this offer, I am not going to give him another offer because I would rather just let the business run itself to the ground and when the bank funds are depleted, we will have to start digging into our own pockets to pay for the remaining lease and obligations and then close when the lease expired next May.

I guess you don't ever really know someone until things get ugly. Bottom line is MONEY is the root of all evil and that you should NEVER go into business with a friend or family member. That is a general rule of thumb that I thought I could bend a little but I guess this is a lesson learned.

Do you think I should change my name from Auto Mall Tint Factory to Auto Mall Tint Shop or use my other company's name of California Sunscreen?

Just doing a little venting and hope that other's will learn from my mistakes.

skittles15 · July 16, 2004

wow, thats tough. if you are forced to change the name change it to auto mall tint shop, this way your loyal customers won't get confused. as what you I would do with him is sit down and have a few beers and talk everything over, EVERYTHING. this way everything is on the table and you'll see each other's point of view. but I don't know much about this...I'm just another college student

July 16, 2004

Sorry to hear about that. It sucks when your "friends" try and take advantage of a situation. I would change the name to Califoria Sunscreen, in my opinion it has a catchy easy to say feel about it. Kinda hip. This guy should feel lucky that you are offering him anything since he has brought very little to this partnership.

Image Tint · July 16, 2004

Tough situation man...

I would make him that offer, which is more than fair, or give him one month to be up to speed in the business. If in one month he can't install side windows in a timely manner or shrink & install a back window by himself, then I would get rid of him by breach of contract.

He hasn't held up his side of the agreement it sounds like. A partnership is just that, if you are doing 80% of the work then give him only 20% of the profit. You'll see him start to learn the ropes then, I guarantee it :lol

Devil with bad attitude · July 17, 2004

Bad luck there Lite! You said it earlier and that was "not all people can tint."

It definately has a knack to it and really does require a special person with special adaptive skills.

What would I do? :lol

Try and get him out for as little as possible or put the onus back on him that he has to develop the audio side or the partnership is dissolved. If he is not prepared to do that, then I'd let him try tinting on his own whilst you get happenning California Sunscreen.

From what you say, he won't get it off the ground and may walk with what he came in with.

Devil

RICHat22 · July 17, 2004

IDo you think I should change my name from Auto Mall Tint Factory to Auto Mall Tint Shop or use my other company's name of California Sunscreen?

As long as your name is in good standing, and the other name will close down, I would take the name, phone number and anything else you can and change to Auto Mall Tint Shop. The only downfall would be if he tried to compete and spread rumors of "you copied him, similar name, I hate him", etc. But all in all, that BS will go away soon as well. You have a nice setup. Good luck. And remember that your friends (partners) are gererally only friends when things are going their way. Look out for yourself and line your pockets as honestly as you can and it will all work out. :lol :inot

Tinitman · July 17, 2004

I agree with the rest.

I would sit down with him and explain it this way. You feel the partnership is not working, you feel you re getting the raw end of the deal because he is not willing to put in more effort to produce income. Offer to buy him out for that price. If he says no, tell him that again you want out and start making arrangements to leave. Just make sure your name is removed from everything in the old business. It will be just like a divorce, name calling, injured egos, loss of a friend, etc.

I like California Sunscreen

July 17, 2004

Thanks for your inputs. We have decided that it will be to his best interest for me to buy him out because if I walk away, the business will fail. He does not have the first clues of how to run a business. Since everything is under my name, I will have to go to Fictitious Business Names and reapply for another business name for that location and close down Auto Mall Tint Factory. Then I have to go to the bank and close our account and reopen a new one under my new name. Change the name on the lease, PG&E, telephone, vendors, etc.

My biggest problem is what name should I call it. I have semi-established Auto Mall Tint Factory with a few dealerships and quite a few customers. If I change the name to California Sunscreen, people might not know exactly what I do. But then again, I have been running that business for over 16 years now and it has definitely been successful.

The few names that I have thought of is:

Auto Mall Tint Werks

Auto Mall Tint Specialist

Auto Mall Tint Shop

California Sunscreen

Which name out of the 4 would you choose? I am going to post this up on the General forum to get more feedback because I need to make a decision by Monday morning.