Borrowing money from family member to purchase existing business. Best approach

[maria3223]

I have the opportunity to purchase an existing profitable business which is also a franchise. The only way I can purchase this business is to borrow money or ask my sister about investing. She would be putting in about 90% financially, but I would do all the work.

The franchise fee is 9% and this business is profitable with growth potential. The existing owner lost the time she needed to run it and is busy with other projects

What should I do? If I just get a loan from my sister, how can I be sure it's a good deal for both of us? Should I just have her invest? What's a good plan?

The amount I need to borrow is 48,000 but the business has a potential of 65,000 annually.

[tagteam · Accepted solution]

Business and legal advice (in particular prospectively) is beyond the scope of this board.

You should absolutely consult with local legal counsel.

See https://www.avvo.com/contracts-agreements-lawyer.html

Also, you might want to seek the advice of a financial/business consultant in your area.