wdf business- subcontractors

[RBHII]

For those out there that do wdf, is there anyone who handles it with 'subcontractors', ie attendant runs the wdf business in exchange for cleaning, etc. And if so, do you still view this as 'your business', ie if the attendant were to leave? I just posted about a store I've been looking at with a wdf situation, but thought I'd ask outright if anyone else does this, and what impact it has on who 'legally' owns those customers. Thanks

[JBTcajun]

To me this is a funny question. The costumers legally own themselves. Unless you have outstanding contracts with them there is nothing to own. Are you planning on firing the attendants? I would not even discuss changes with them until you have secured all files, mailing lists, etc.(hoping they have not been copied in expectation of a change) Are they operating on their own business license? ( i doubt it) Are they filing taxes? ( I doubt it) If someone were to trip on the door jam on the way in who would get sued?(you and you're business) If infact there is as much wdf as you say it would be worth taking over. I am to much a control freak to have someone in my mat messing with my reputation not to have some input. If these people feel they own the wdf business they should go to their facilities and handle their business, otherwise accept the changes you make. The customers will in the most part remain at the mat if the serve is equal to or better than what is there presently.

[RBHII]

great points....I guess at the end of the day, I may not be able to 'legally' stop them from contacting customers....but it's likely most customers aren't so attached to the attendants....I just worry about her going down the street, cutting a deal with the owner who may be happy with the extra coin revenue, and she contacts the customers.

[William]

I run my wdf as a contractor. Here are my rules:

1. Set your own hours, but you must post them on the office door and stick to them.
2. Set your own prices, but you must post them.
3. I have my deal with one lady. If she wants to have others help her that is fine, but she pays them. I don't tell her who to hire, but I have some input if they don't dress nice, or don't do a good job cleaning.
4. I pay my lady to clean the laundry. It is a flat rate. She gets a 1099 for her fee. She is responsible for reporting her own income from the wdf.

As far as going down the street and cutting a deal, who cares, as long as she keeps my place clean. I pay her to clean, the wdf is all hers. Sure I make money when she puts her coins in my machines to wash her customers clothes, but otherwise I just want the place clean.

For all of you that are going to reply that I am going to get in trouble with the IRS, my accountant reviewed everything and consulted with his buddies over there and they said no problem. The lawyer also looked it over and said no problem.

It is no different than hiring a janitor service on the cleaning end. On the wdf end, as long as you don't try to control them in an employer/employee fashion, you are fine with the IRS.

As a practical matter, I have enough say in the goings on that I can put my foot down if I don't like someone she brings in to help, and I have done so before. Keep a good relationship with your contractor and they will realize that the deal is good as long as both sides are happy!

[RBHII]

William, thanks, sounds like the same exact situation that exists on the store I want to buy. Let me ask you, why do you pay her to clean, in addition to what she is able to make on wdf? Wouldn't her cleaning and attending the mat be the one thing you should get in return for her using your mat? How would you feel if this wdf business became really substantial, would you want to recapture this as part of your business?

[William]

I pay her to clean because I like her and I want to supplement her income. Plus, I am still saving a ton of money, because wdf brought in less than the cost of payroll. So I don't have to fool with paychecks or paperwork, and I save a bunch of money.

If you feel that wdf can generate enough money that you don't have to pay your contractor to clean up, you might still consider a token payment to prove that you hire her just to clean, and that wdf is totally her game. You could then charge her rent for the office space, assuming you have some. By swapping checks, your position with the IRS is even stronger.

I doubt I would take back the wdf for the reasons listed above. If she can grow the business (and she has), and can make lots of money, then I am happy for her. If it got to the point that wdf is making enough to cover payroll if they were not contractors (currently it is very close) I still would not want it because I don't like paperwork, scheduling, payroll, quarterly taxes, etc. So I hope she makes a ton of money so she stays happy and I don't have to do anything other than collect quarters!