Saturday, February 17, 2024

A Lesson from Ryan Duffy's Franchise Dispute

 A Lesson from Ryan Duffy's Franchise Dispute

Hello Everyone,

Today, I stumbled upon an intriguing newspaper article that sheds light on the complexities of a small business deal. Let's dive in.

The Unseen Opportunities in Newspapers:

Being an avid newspaper reader, I often discover unique business opportunities and insights that aren't readily available elsewhere. Years ago, I came across a headline involving a dispute related to the Donair dynasty, and while it might seem like a family matter, it unveils the intricacies of a real small business deal.

The Donair Dynasty Background:

The article delves into the history of the Donair, tracing its roots to an immigrant from Greece who created a sweet-sauce version of the traditional gyro sandwich. 

This innovative twist led to the establishment of the King of Donair chain, becoming a thriving business. 

Fast forward, and a family dispute over a small business deal surfaces, bringing the details into mainstream media.

Ryan Duffy's Franchise and Financing Dynamics:

The focus of our interest lies in a franchise deal involving Ryan Duffy's, a well-known steak and seafood house in Halifax. 

Two parties, Bern and Costain, sold their Ryan Duffy's franchise to Gamalakos, the son of the Donair inventor. 

The purchase price was $400,000, structured as a financing agreement.

100% Seller Financing and Promissory Notes:

Here's the intriguing part — the entire $400,000 was financed by the sellers through two promissory notes. 

Yes, you read that right, 100% seller financing. The agreement required monthly payments with a 4.5% interest rate. The transaction details are somewhat unusual, as it was a share deal for a restaurant, not the typical asset sale.

My guess is that the sellers were only willing to do this because they believed the buyer had the experience and expertise to successfully execute on the project.

Defaults, Guarantees, and Legal Consequences:

Unfortunately, the buyer, Gamalakos, defaulted on the payments just under a year after the deal in December 2017. What's notable is that the sellers, instead of reclaiming the restaurant, pursued legal action to recoup the money.

 The article mentions an interesting negotiation point — Gamalakos offered a 50% personal guarantee, reducing his potential liability.

Insights into Real Business Deals:

This real-life scenario offers a glimpse into the dynamics of small business transactions.

It dispels the myth that deals are always done with full cash payments and explores the intricacies of seller financing, defaults, and negotiations around personal guarantees.

Learn to Navigate Business Deals:

For those aspiring to buy a business one day, it's crucial to understand these deal dynamics. I've crafted a comprehensive program on how to buy a business, encompassing video tutorials, online courses, and group coaching. 

Whether you're a seasoned entrepreneur or new to the business world, there's something valuable for everyone.

Remember, negotiating personal guarantees is not set in stone. 

It's a skill, and as showcased in this real example, negotiations are possible.

Cheers to unveiling the secrets of business transactions!

If you want to learn more and see my latest videos, be sure to subscribe to my email list at 

David Barnett

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