Tomahawk - to avoid after lockdown

It might save them half a million quid, of pure cashflow. Without positive cashflow, even a good business can fail extremely quickly.

The leases and mortgages they have took on, have meant they have probably took on 20-50 staff per location, too. If you bin the expansion, you bin the jobs too. That would have been say another 200, on the dole, rather than on furlough.

And yes, if they're saying they can pay it back, I would assume they can, if they can't then the staff don't have a job, which is a much bigger problem than losing/ lending 10%. Lenders will look at them more favourably if they go back to trading well over summer.

Banks don't want risk now, that's up to them. But if the banks don't want to lend then there goes 500 jobs. What then?

Also, if it's purely for short term cashlfow, banks may be reluctant, as they like to fix loans against assets, so that if it all goes t*ts up, then they have something to take. I expect all their property will be leased or mortgaged, so they may not have much to loan against.
The daft thing is, if they wanted a loan for a digger (that would be of no use to them), then they would probably get it.
I think you’re probably a bit optimistic with “half a million quid”. Who have they employed in these new places when there’s nowhere open and nobody working?
What the accountant can hide and not making a profit are two totally different things. The poor devils on minimum wage won’t be able to write things off against tax like a company will.
We’ll have to agree to differ because you clearly think the low paid should get down on theirhands and knees and kiss their employers @rze for their job and I don’t!
 
I think you’re probably a bit optimistic with “half a million quid”. Who have they employed in these new places when there’s nowhere open and nobody working?
What the accountant can hide and not making a profit are two totally different things. The poor devils on minimum wage won’t be able to write things off against tax like a company will.
We’ll have to agree to differ because you clearly think the low paid should get down on theirhands and knees and kiss their employers @rze for their job and I don’t!
Maybe, but the figure is irrelevant, it might be 300k, if each employee is paying £200 for 3 month. Might even be half that.
But whatever it is, that may be the difference between having money to buy stock, to cook and sell, or not. If you can't buy, you can't sell, you make nothing, you lose lots.

I don't know when each additional location was added, if it was pre-October, then any staff employed can be paid furlough for November to whenever they reopen, which is 6 months or so of 80% for doing nothing, rather than 6 months of no job. Then they actually have a job to go back to, which will be 100% pay when they reopen.

The staff don't need to be in work to be getting that 80%, they get that sat at home, but they wouldn't be getting that 80% if they didn't open the premises and there would be no job to go back to in May or whenever it's going to be.

Do you really think all accountants manipulate figures, so that start-up businesses appear broke for the first 5 years or whatever? :ROFLMAO: :ROFLMAO:
Is every business and accountancy firm fraudulent?
Or maybe it's just that starting up and building a client base, and stock and assets take a long time to do, and it takes a long time to get margins up.

I don't think they should get down on their hands and knees and kiss their employers @rze, but I think they should be realistic about what the alternative might be, and pick the one which will likely end up with them having the most money and better life in 6 months time., which is ultimately what I would want for anyone.
If they don't like the offer they can leave, nobody is forcing them to take it, the same way nobody has forced them to take 80% for sitting at home for 6 months of the year.

Out of interest, have you ever ran a business or actually had many dealings with accountants? If so, on what scale? Why would an accountancy firm risk their entire company on fraudulently misrepresenting a small business figures? How od you "hide" electronic transactions, or profits, especially since MTD came in?
 
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If it's as reported, then it's clearly going to get people's backs up. But as AndyW said, this is a company employing quite a lot of people and on an ambitious growth path. If it fails, then there's a lot of people - presumably some of them young - without a job. If the company needed to raise some money, some sort of share issue might have been a good idea.

People who work in young growing companies quite often do so knowing they'll have to work extra time, or cover two jobs or do more than the regular hours. It's not quite the same as asking people for a loan, but if you have a job you like and you can see a future then it's pretty normal.

If all you want to do is the bare minimum, just turn up and take the money, then I can imagine you'd be pretty outraged by this.
 
Out of interest, have you ever ran a business or actually had many dealings with accountants?

What’s the point if you don’t make any money?
 
If employees are on zero hour contracts and have been asked to bail out the business, many will likely find better opportunities elsewhere moving forward. They may move into education, learn new skills, set their own business up or find a different job - there's lots of different permutations. This belief that one should grab anything they can get...and be grateful for doing so is just plain wrong.

If Tomahawk ends up going to the wall, so be it. They will be replaced by other businesses who will employ people. If those business aren't up to scratch or gain a bad reputation then they will fail as well. That's business at the end of the day. It proves the point that you need a good business model/strategy that is sustainable and looks after its employees.
 
For a half decent full kitchen renovation you are looking at £150,000 minimum with all new gear and appliances.
 
If it fails, it is the responsibility of the director and the decision makers involved with the doomed lockdown expansion - not the regular staff. So why should they be threatened (having your "suitability for the role reviewed" sounds like a threat to me, despite what's been said already on that) to cover bad business practice without reward? Being able to continue working in a low paying job in hospitality as a "reward" for an interest free loan doesn't sound like any kind of privilege.

Coming back to something I said earlier about how if the timing was different with lockdown and vaccines, then it could have been a very different story - hypothetically, if the business did take off rapidly in a post-lockdown boom, then would the employees feel the same success as the directors? Absolutely bloody not - even if the risk paid off for Tomahawk, the regular employees would have seen sod all of any spoils, and would have been kept on the same wage (likely minimum / living wage for most too). That's how business works these days - directors rewarding themselves with bonuses, Ferraris, flash watches and extra properties in the good times (as the Tomahawk director has done as per his Instagram and Facebook profiles before he set them all to private), and then fleecing employees and holding their hands out to the government to support them through the bad times.
 
As has been said by others - if they'd made it clear this was totally optional and offered some kind of benefit - equity even if only a small amount or at the very least interest then things are different.

They've offered no proof to refute the allegation that they wanted an interest free loan from their staff and in order to focus their minds made a very unsubtle threat that they would be let go if they didn't agree.

As it goes it's a huge PR gaffe. It 100% has influenced me to avoid their restaurants etc in the future.
 
@Andy_W is right.

He is simply saying we don't know the actually circumstances of the company and offering a perfectly plausible, if not actually likely (in my opinion), scenario.

What people have to consider is the level of agreed borrowing compared to assets. We don't know if the properties Tomahawk are expanding into are being bought or rented, nor the terms of the agreement. There may have already been a repayment or rental holiday baked in to the agreement at the start, while the property was fitted out and it's first few months of trading. This makes it less likely that a lender will be keen to allow another holiday, certainly not a lengthy one, despite covid.

What people need to remember/understand are the terms of the governments Bounce Back Loan Scheme (BBLS).

'The scheme helps small and medium-sized businesses to borrow between £2,000 and up to 25% of their turnover. The maximum loan available is £50,000. The government guarantees 100% of the loan and there won’t be any fees or interest to pay for the first 12 months. After 12 months the interest rate will be 2.5% a year. The scheme is open to applications until 31 March 2021. If you already have a Bounce Back Loan but borrowed less than you were entitled to, you can top up your existing loan to your maximum amount. You must request the top-up by 31 March 2021.'

It is extremely unlikely Tomahawk only needs this amount of finance.

Which means the Business Interruption Loan Scheme (BILS).

'The scheme helps small and medium-sized businesses to access loans and other kinds of finance up to £5 million. The government guarantees 80% of the finance to the lender and pays interest and any fees for the first 12 months. The scheme is open until 31 March 2021.'

So what we have is the company having to convince a lender of the other 20% as well as a scheme that is about to possibly hit that 1 year cut off date regarding interest. Does that not appear to explain why the company is taking some action? For them, the return to normal is not going to occur for another 3 months at least, so some measure is required to bridge the gap.

Also, if there was only the one establishment, perhaps the storm could be ridden, but with 12, it is much more difficult. Remember, the government only pay 80% of the gross wage, but the company has to fund employers NIC, 13.8% on top of the gross wage over £169 per week and mandatory employers pension contributions of 3% of salary. How does it pay this if there is very little coming in. Eventually reserves are used up and lenders won't lend because they may consider they are over exposed.
 
@Andy_W is right.

He is simply saying we don't know the actually circumstances of the company and offering a perfectly plausible, if not actually likely (in my opinion), scenario.

What people have to consider is the level of agreed borrowing compared to assets. We don't know if the properties Tomahawk are expanding into are being bought or rented, nor the terms of the agreement. There may have already been a repayment or rental holiday baked in to the agreement at the start, while the property was fitted out and it's first few months of trading. This makes it less likely that a lender will be keen to allow another holiday, certainly not a lengthy one, despite covid.

What people need to remember/understand are the terms of the governments Bounce Back Loan Scheme (BBLS).

'The scheme helps small and medium-sized businesses to borrow between £2,000 and up to 25% of their turnover. The maximum loan available is £50,000. The government guarantees 100% of the loan and there won’t be any fees or interest to pay for the first 12 months. After 12 months the interest rate will be 2.5% a year. The scheme is open to applications until 31 March 2021. If you already have a Bounce Back Loan but borrowed less than you were entitled to, you can top up your existing loan to your maximum amount. You must request the top-up by 31 March 2021.'

It is extremely unlikely Tomahawk only needs this amount of finance.

Which means the Business Interruption Loan Scheme (BILS).

'The scheme helps small and medium-sized businesses to access loans and other kinds of finance up to £5 million. The government guarantees 80% of the finance to the lender and pays interest and any fees for the first 12 months. The scheme is open until 31 March 2021.'

So what we have is the company having to convince a lender of the other 20% as well as a scheme that is about to possibly hit that 1 year cut off date regarding interest. Does that not appear to explain why the company is taking some action? For them, the return to normal is not going to occur for another 3 months at least, so some measure is required to bridge the gap.

Also, if there was only the one establishment, perhaps the storm could be ridden, but with 12, it is much more difficult. Remember, the government only pay 80% of the gross wage, but the company has to fund employers NIC, 13.8% on top of the gross wage over £169 per week and mandatory employers pension contributions of 3% of salary. How does it pay this if there is very little coming in. Eventually reserves are used up and lenders won't lend because they may consider they are over exposed.
But they're doing this on the backs of minimum wage staff supplying an interest free loan by being coerced by their employer to do so. It is inappropriate.

When everything's back to normal and the business hopefully is successful what do the staff get for their interest free loan?

What if it goes to the wall and they default on the loan - people on minimum wage are out of pocket.

I have heard of other businesses asking staff to take a pay cut etc but it has always been with some payback - equity, interest, future higher earnings etc.
 
But they're doing this on the backs of minimum wage staff supplying an interest free loan by being coerced by their employer to do so. It is inappropriate.

When everything's back to normal and the business hopefully is successful what do the staff get for their interest free loan?

What if it goes to the wall and they default on the loan - people on minimum wage are out of pocket.

I have heard of other businesses asking staff to take a pay cut etc but it has always been with some payback - equity, interest, future higher earnings etc.

If they are coercing staff, then that is illegal as well as immoral, but the company statement denies this.

With regard to low paid staff, they may actually still be better off than they were. It all depends on the proportion of income they had available for going out themselves. They may have it available because they don't have kids, a mortgage, aren't travelling and aren't going out drinking or eating themselves.
 
If they are coercing staff, then that is illegal as well as immoral, but the company statement denies this.

With regard to low paid staff, they may actually still be better off than they were. It all depends on the proportion of income they had available for going out themselves. They may have it available because they don't have kids, a mortgage, aren't travelling and aren't going out drinking or eating themselves.
Multiple employees have gone to the press all using the exact same phrase (I'm not sure if anything in writing was supplied as all I've seen was they had an all hands meeting on Zoom) - if you refuse your "suitability for the role will have to be reviewed".

Apart from anything else, the risk is all on the employees, if the business succeeds they get their money back, if it fails they lose it. They don't get anything in return for what is effectively an investment in the future of the business.

It is at very least immoral.
 
'the risk is all on the employees'

On this 10%, yes, but the company already has everything else at risk and the existing lenders have much at risk, as do the government who has guaranteed some of these loans.
 
'the risk is all on the employees'

On this 10%, yes, but the company already has everything else at risk and the existing lenders have much at risk, as do the government who has guaranteed some of these loans.
And they stand to gain if things go well.

The best the employees can hope for is to get their money back - not a single penny of interest.

As I said earlier, more reputable firms have asked staff to take a temporary pay cut and been upfront in payback terms - you will get the money back with x% interest, you will get equity at x amount, you will get future higher earnings of £x.

At very least it will stick in the craw that you've got the owner driving around in a Ferrari whilst asking people on minimum wage which is already reduced to 80% of minimum wage to take a further cut. It is inequitable.
 
There is no doubt that they have made a huge mistake with this "loan" scheme, however to me it shows the huge flaws with the so called job retention scheme.

These are companies that have be legally forced to closed for an extended period of time, in part due to government incompetence, yet are forced to cover costs of employees NI and pension contributions with little to no income and loan scheme's not fit for purpose.

There is no difference from the start of this pandemic to now in terms of being closed, so why the difference in the JRS? The government should be covering these costs just like it did before Rishi Sunak caused thousands to be made redundant with his blind ratcheting down of the scheme last September.
 
And they stand to gain if things go well.

The best the employees can hope for is to get their money back - not a single penny of interest.

As I said earlier, more reputable firms have asked staff to take a temporary pay cut and been upfront in payback terms - you will get the money back with x% interest, you will get equity at x amount, you will get future higher earnings of £x.

At very least it will stick in the craw that you've got the owner driving around in a Ferrari whilst asking people on minimum wage which is already reduced to 80% of minimum wage to take a further cut. It is inequitable.

I agree the terms should mean interest paid.

I have no idea if the owner is driving around in a Ferrari, but in my experience directors usually cut their own salary before employees if they can and often use their personal assets such as their home as collateral.
 
I don't doubt they will be struggling with 12 venues, and yes nobody will know the true details unless you are a director or decision maker in the company.

However, I do know that the director has a significant amount of personal wealth, and begs the question why he isn't willing to let some of that go in order to prop up the business? As Andy_W has pointed out, they are his things that he has worked hard for and understand there may be some reluctance, but he would also be able to feel a direct benefit of his cash injection when business picks up as he will be able to pay himself more from the future profits and buy back lost assets. Why ask your employees to make proportionally much bigger sacrifices from their rubbish wages if you have such faith in the company? In the past, I've had to sell some of my more valuable possessions to get me through rough patches - did I want to do that? No, of course not, I did it out of necessity.

Another recurring excuse throughout this thread is that this is a fledgling business and needs time - although Tomahawk is a new brand, the director is an astute businessman with plenty of experience in retail and hospitality so he absolutely knows the score and should know better. If you visit the parent company website (I'll save you a Google - https://www.rhpd.co.uk) then you'll see that Tomahawk is an offshoot of a bigger, mature business portfolio including other retail ventures, residential and commercial property lettings. If the whole thing is in danger of crashing and burning, as I'm fully aware the property sector is also struggling, it is not the responsibility of the Tomahawk employees. I don't know how much more that can be emphasised - it is down to the director and decision makers to come up with a solution, and the one they chose was very much the wrong one.

Just to finish up this comment, I've also attached a screenshot of the comments on one of his Facebook posts where someone else has kindly pointed out that he should be looking to sell his Ferrari Testarossa (not even his main Ferrari, which is a 488!), which he acquired on the 30th October last year, so well in the midst of the pandemic, and is parked outside his Newcastle Tomahawk. But come on, let's hear some more justifications about how his employees should foot the bill.
 

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Out of interest, have you ever ran a business or actually had many dealings with accountants?

What’s the point if you don’t make any money?
I'll take that as a no then.

You can make money, but it's extremely difficult at the start, which is why most go under very quickly. I run three businesses, rent out some space to a few others, they all make money, wasn't like that at the very start, for any of them. Every single one of them has struggled massively to get any meaningful support, and the CBILS has effectively been a non-starter for nearly all of them.
 
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