What's Your Exit Strategy?

I had a meeting recently with a long-time business owner and franchisee. I was reviewing a new franchise agreement that he was being asked to sign for several franchised locations. The agreement was for five years, no right of renewal. This gentleman was not concerned with the lack of renewal rights at first, since he figured he would be retired by then. But when we started to talk a bit more about the value of the business that he had built over 25 years, it was evident that he had not considered a sale of the business as part of his exit strategy. In fact, he just thought that in five years, he would walk away. The business had been good to him, allowing him to earn a living for many years. After discussing a possible sale, he realized that there could indeed be someone out there who might be willing to pay for an assignment of his franchise rights. Once this realization hit him, he understood the value of a right to renew in his franchise agreement (and his leases). It's interesting to me that some business people don't think of their businesses in terms of saleable. They are a way to earn a living, but can also be a substantial asset that someone else will pay good money for. Even though a business is franchised, and sometimes there are restrictions on sale, it's worth having a look at and determining what the exit strategy may be. Once you know approximately when and how you wish to exit the business, it allows you to have a look at opportunities you may not have thought of before. And the strategies for getting there - like ensuring you negotiate for a right to renew an agreement. What's your exit strategy? Knowing the answer to that question makes good business sense.

The Family Business

I have had a few years of experience under my belt, dealing with all sorts of businesses, and I would say that one of the most challenging is often the family run business. You know, the company that grampa started, and now has been passed down to dad, who has his two kids also working in the business? The difficulty with this sort of business, is that it has this extra layer or nuance, easily recognizable at the dinner table during the holidays. Sometimes, mixing family and business can work, and sometimes it creates so many undercurrents in everyones' lives and creates so much stress, that it never really becomes what it could be. If you are involved in a family run business, I would highly recommend a book by Tom Deans called "Every Family's Business". It is an interesting and eye-opening read. CAFE (The Canadian Association of Family Enterprise) is lucky enough to have him coming back to Barrie to talk about family businesses and succession planning. Burgar Rowe is proud to be one of the sponsors of this event, being held at the Barrie Country Club on October
18th from 7 - 9pm. If you are interested in attending, call Joan at (705)726-6331.

Health Practitioners Treating Spouses Beware!

A recent Ontario Court of Appeal case should be noted by all health professionals as a potential cause for concern. Leering v. College of Chiropractors of Ontario
[2010] O.J. No. 406 seems to indicate that a health professional treating their spouse, as a patient, is automatically in violation of section 51(1)(b.1) of the Health Professions Procedural Code! While there must be a patient/health professional relationship established, as opposed to mere “episodic” care (ie) a doctor and her husband are in an accident and she gives him emergency treatment, this along with a sexual relationship is all that is needed in order to be in violation of the Code. If you are a dentist and you see your spouse in your office every 6 months for a checkup, she is likely a “patient”. If your spouse later complains to the RCDS, you could have the same trouble as Leering.

Osgoode Hall Law School’s website “The Court” has a good article on this case and a few other related cases, for those of you who may be interested in more information at http://bit.ly/bfhTob Sometimes legislation gets written, usually with the best of intentions, but the language is poor and so the courts are then faced with having to follow that language, even when the result seems a bit extreme. Hopefully the various lobbying bodies for the professions will jump on this and attempt to have the legislation amended so that the mere fact that someone treats their spouse is not, in and of itself, “sexual abuse” and professional misconduct. Certainly we all want to ensure that patients are protected from abuses of power by medical professionals. But speaking as the spouse of a dentist, I see absolutely no reason why I should not have the best dentist I know treat me, just because I happen to also be married to the guy!

Bill 168: Tips on How to Comply

I have been starting to field calls from clients regarding complying with Bill 168 and the new amendments to the Occupational Health and Safety Act (Ontario). There are numerous resources out there to assist employers with complying. The Ministry of Labour has a great booklet with sample policies and information on duties of employers and how to comply at http://www.labour.gov.on.ca/english/hs/pdf/wvps_toolbox.pdf. There are consulting companies that offer staff and management training and education programs and they will also assist in policy development. Employers can also check with their local Chamber of Commerce. Many Chambers are offering seminars for their members. You can take one of several online courses at http://www.iapa.ca/Catalog/ProductDetails.aspx?id=593 if you prefer web based education in the comfort of your office. Basically, there are numerous opportunities for learning about these new requirements and making sure your business complies. Staying on top of legislative changes that effect your workplace just makes good business sense.

Bill 168 - New Legislation on Workplace Safety - Will Your Business Comply?

If your business has employees you need to be aware of Bill 168, which comes into effect on June 15, 2010. It sets out a number of amendments to the Occupational Health and Safety Act (Ontario). These amendments require employers to develop and maintain policies that address workplace harassment, violence and threats of violence in the workplace. And the policies must be reviewed at least annually.

Workplace Harassment is defined as "engaging in a course of vexatious comment or conduct against a worker in a workplace that is known or ought reasonably to be known to be unwelcome." Workplace harassment may include bullying, intimidating or offensive jokes or innuendos, displaying or circulating offensive pictures or materials, or offensive or intimidating phone calls.

Workplace Violence means:
(a) The exercise of physical force by a person against a worker, in a workplace, that causes or could cause physical injury to the worker;
(b) An attempt to exercise physical force against a worker, in a workplace, that could cause physical injury to the worker; or
(c) A statement or behaviour that it is reasonable for a worker to interpret as a threat to exercise physical force against the worker, in a workplace, that could cause physical injury to the worker.

In workplaces of more than five employees, the policies are to be written and posted in a conspicuous place in the workplace. There have to be mechanisms for reporting violence, investigating complaints and controlling risks.

In anticipation of this new legislation, employers should be reviewing their current policies, assessing risks, security protocols and procedures and implementing training for staff.

For more information, check out the Ministry of Labour Website at http://www.labour.gov.on.ca/english/hs/sawo/pubs/fs_workplaceviolence.php

HST and Resale Real Estate

Many potential home buyers and sellers have been worried about the implications of the HST which kicks in as of July 1, 2010. In fact, no HST will be applicable on the purchase price of a resale home. Some ancillary services, however, will be subject to the new tax. Sellers will have to pay 13% HST on real estate commissions and legal fees associated with selling. Buyers will pay 13% HST on their lawyer's fees and things like house appraisals or status certificates on a condo. But the bulk of the expense - the purchase price, is not taxable. The implications, therefore, for home buyers of resale homes, are not huge. Certainly no reason to panic or rush a decision to purchase your home.

When a Non-profit closes its doors

I just had a question from an accountant friend of mine who asked me the following: a nonprofit client is shutting down its operations and it has a suplus. Where does the surplus go? The answer is "it depends". If the non-profit is a registered charity - the surplus should go to another registered charity. The articles or by-laws of a corporate charity may indicate what sort of charity (usually similar in nature) the proceeds will be disbursed to. If the organization is a nonprofit but not a charity, the proceeds can be disbersed to its members, unless its articles or by-laws stipulate otherwise. Of course this is just Ontario law, folks! Every jurisdiction has different rules.