Tomahawk - to avoid after lockdown

[deadmau5]

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.

Look at the RHPD link - he has plenty of mature, money-making business with valuable underlying assets (property) that he can make use of (and take business loans out against). So no, it's not 'at the start' - he's been in the hospitality business since he opened Hide bar in Yarm back in god knows when. It is still the current location for the Yarm Tomahawk as well, which is a rebranded Lotus Lounge with a different menu, which is in turn a rebranded Hide Bar with a different menu - far from fledgling.

 

[boynogg]

I wonder if he is selling his car reg, must of cost a few bob, I do have to express an interest as I work in health and safety

 

[WoodallServices]

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.

No I haven’, but that’s because we’ve become too comfortable in the life we have rather than the wherewithal to do it.....especially anything customer service related.
Good luck to you if you’ve got successful businesses but that doesn’t mean you’re right defending this chunt. As people are proving he’s full of s**t.

 

[Andy_W]

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.

It wasn't really doomed was it, seeing as it's functioned and survived up to now, and might only need 10% for a short period to get it over the line. It's lasted longer than some businesses which have been going 20 years. Maybe they were promised finance of backing which never materialised, it doesn't take much for well made plans to go wrong extremely quickly.

It's not a threat, it's possibly a harsh reality with little alternative. There would be people willing to do that job with the 10% loan, hence why most seem to have gone for it.

The regular employees would be in line for a promotion if they stayed, in an expanding business, what are they in line for if they leave?

Not all directors are like that, it's far from the case. What was his financial situation like before 2017? Do you know him well?
Maybe what he's got is from what he's earned personally, from 60-90 hour weeks and taking on masses of risk and stress?

If I had been sat at home on 80%, and my employer asked for 10% over a short timeframe I would snap their hand off.
No, it shouldn't be needed in an ideal world, but the world is not ideal.
Think about those on the dole, who worked for companies that went under, it can get worse.

 

[Andy_W]

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.

No, the gain is keeping employment, not risking losing it to the same degree.

If you look at it like the job they have is not viable, then they're gaining having a job in 6 months time, and getting all of their money back, which seems like by far the most likely scenario.

If you think 5% interest is the difference between this being a good idea and a bad idea, then you're completely missing the point. It's practically exactly the same thing.

5% interest for a year, on a £500 loan is £25, this is about 0.25% of £10,000 worth of earnings, which most of them will get before the end of the year.

That's it 0.25% between this being "good" from a more reputable firm or "bad" from a small business? It's the same thing, the word "interest" is just used to stop people complaining, and it seems to be working on you lot.

 

[JustTheGent]

You'd snap the hand off of your employer if they asked you for a loan?

With regards to the director. What work he may or may not have done over the years. It doesn't give him the right to pinch money out of other people's pockets.

 

[Randy]

Look at the RHPD link - he has plenty of mature, money-making business with valuable underlying assets (property) that he can make use of (and take business loans out against). So no, it's not 'at the start' - he's been in the hospitality business since he opened Hide bar in Yarm back in god knows when. It is still the current location for the Yarm Tomahawk as well, which is a rebranded Lotus Lounge with a different menu, which is in turn a rebranded Hide Bar with a different menu - far from fledgling.

I was waiting for somebody else to bring up his other ventures before I did.

@Andy_W are you his Ferrari mechanic?

 

[deadmau5]

It wasn't really doomed was it, seeing as it's functioned and survived up to now, and might only need 10% for a short period to get it over the line. It's lasted longer than some businesses which have been going 20 years. Maybe they were promised finance of backing which never materialised, it doesn't take much for well made plans to go wrong extremely quickly.

It's not a threat, it's possibly a harsh reality with little alternative. There would be people willing to do that job with the 10% loan, hence why most seem to have gone for it.

The regular employees would be in line for a promotion if they stayed, in an expanding business, what are they in line for if they leave?

Not all directors are like that, it's far from the case. What was his financial situation like before 2017? Do you know him well?
Maybe what he's got is from what he's earned personally, from 60-90 hour weeks and taking on masses of risk and stress?

If I had been sat at home on 80%, and my employer asked for 10% over a short timeframe I would snap their hand off.
No, it shouldn't be needed in an ideal world, but the world is not ideal.
Think about those on the dole, who worked for companies that went under, it can get worse.

It might not have seemed doomed at the time of expansion, but certainly a huge risk and they will have known that - and it's certainly looking doomed now. If it only needs a small amount of money to tide over a short amount of time, then he can use a bit of his personal wealth instead of his employees wages, or borrow against his business which we have now established could be eligible for a lot more given the small role Tomahawk plays in the wider company.

I get that he will have worked hard to purchase his life luxuries, but his employees have also worked hard on his behalf to his and his business's benefit. The difference is his employees will be using their wages to keep a roof over their heads, their bills paid and keeping food on the table - not wrapping their wrists in Hublot watches and picking up classic Ferraris. This also comes back to my point that the directors call the shots - they get the biggest rewards for good decisions in the good times but should also hold full accountability for when things don't go so well, and should find a viable funding alternative than going hat-in-hand to your employees for an interest free loan!

As for snapping his hand off for an interest free loan - I don't even know what to say to that really! Imagine being a 20 year old, sitting at home with your furlough wages being based on 16 hours a week (as an example), so that's £357.76 a month (a month) after the 20% reduction. All through furlough, you have watched the company you work for buy up and refurbish multiple new venues, including a very flash place in London. You've also watched your boss boast about his new Ferrari Testarossa on Instagram and see him regularly with a watch on his wrist worth 4-5 times your annual (annual) salary. You also see him cutting about Teesside in his G63 AMG and his Ferrari 488. Now imagine the scenes when this guy comes and asks for another 10% of your £357.76 a month to "save the business" with the only incentive being you get to keep working for the company for £6.45 an hour when it re-opens, and will be repaid without interest - now tell me how that is a remotely workable solution, and that you still don't understand why people are up in arms about the whole thing.

I wouldn't say I know him well, but that I know him enough.

 

[Lightweight]

“If I had been sat at home on 80%, and my employer asked for 10% over a short timeframe I would snap their hand off. ”

The 80% is not being paid by the employer it is being paid by us by taxes via the Government, if my employer asked this from me I would would flatly refuse.

If the company directors do not feel they will invest £350k in their own company then I would not consider it either.

The average wage in the north east is £26k a year, that’s take home pay of £1776 a month. So someone on furlough at 80% is now taking home £1440 and if they then agree to give a loan of 10% to their employer they have a monthly take home of £1243. Any employer who ask an employee to live of this a month when they may have rent , bill, food and car loans to cover has no idea of how the average person is struggling at the moment.

If ever we needed strong employee rights and union support it is now. I cannot see any justification for this and as a company how can the directors not see that this publicity can only damage the companies name and put the business at risk.

I feel for the employees being put in this position and don’t see the employer saying to the staff from the chain being offered interest free loans in good times.

 

[Andy_W]

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.

It's hard to tell what's going on here, and I have to look into companies often. RHPD doesn't seem to be the parent company, I can't even find them linked to Tomohawk and can't even find them on companies house. Both the Tomohawk and Tomohawk Newcastle names are split between three people mainly, by the looks of it.

The business which has 2/3 of the value is mostly owned by Victoria, whoever that is?

It all seems very complex, I can see why they might struggle for finance, on paper they seem to actually have very little, and not great credit scores.

Howard has/ had about 20 companies, none of them appears to be worth as much as the one victoria mostly has, and the total credit limit he has, that I can immediately see is 25k, victoria has 50k.

The whole thing isn't the tomahawk employees fault, but all the companies are limited and would need to be self-sufficient to be viable, to me this all looks like an absolute nightmare. It seems like quite a full plate.

As far as his Ferrari goes, Testarossa would be a good investment if he owns it outright, probably won't lose any money if bought and sold at the right time. Although now is not the right time to sell, even if he could find a buyer. Not sure why he needs two of them mind, but it may be from other companies not related to tomahawk or stuff he's had from earlier?

The thing is, the companies he's seemingly meant to bail out, he doesn't actually seem to have much ownership of them, or they're certainly not worth much individually? Very hard to tell.

 

[Andy_W]

No I haven’, but that’s because we’ve become too comfortable in the life we have rather than the wherewithal to do it.....especially anything customer service related.
Good luck to you if you’ve got successful businesses but that doesn’t mean you’re right defending this chunt. As people are proving he’s full of s**t.

He might be, and I'm not defending him really, I'm just saying there's a lot more to it I bet, and that the risk v reward for an employee massively favours taking the deal. It's **** and brutal, but it might just be the way it is.

He might just think "**** this" and fold the lot. That's what I think about business quite often, it's just not worth the liability, hours, time and stress. Yet all people on the outside (that don't run a business) do is look at a nice house and car that's on mortgage/ finance and think, look how easy it is for that guy, they have no idea.

 

[Lightweight]

Andy_w knowing the little you know from your research and the bits below would you make an interest free loan of 10% of your monthly income to the company?

 

[Andy_W]

“If I had been sat at home on 80%, and my employer asked for 10% over a short timeframe I would snap their hand off. ”

The 80% is not being paid by the employer it is being paid by us by taxes via the Government, if my employer asked this from me I would would flatly refuse.

If the company directors do not feel they will invest £350k in their own company then I would not consider it either.

The average wage in the north east is £26k a year, that’s take home pay of £1776 a month. So someone on furlough at 80% is now taking home £1440 and if they then agree to give a loan of 10% to their employer they have a monthly take home of £1243. Any employer who ask an employee to live of this a month when they may have rent , bill, food and car loans to cover has no idea of how the average person is struggling at the moment.

If ever we needed strong employee rights and union support it is now. I cannot see any justification for this and as a company how can the directors not see that this publicity can only damage the companies name and put the business at risk.

I feel for the employees being put in this position and don’t see the employer saying to the staff from the chain being offered interest free loans in good times.

They don't get the 80% from the government if the guy doesn't start the company though. They get dole, or no job gets created.
The government is banking on the 80% being an investment basically, otherwise the country folds, they hope that most companies survive, so they can claw that back in tax from them and other companies. You don't get to pay tax if you're not employed, if there's nobody left to employ you.

They might not be able to get their hands on 350k liquid cash, to bail out just one of their companies. They might have already been bailing them out or bailing out others? Or they may see it as a massive single liability against one company that is probably just not worth it to them, to risk what they have built up over 20 years or whatever? It may be tiny reward for a big personal risk, which they do not need to take as the company is limited, and they're probably getting on. The staff have a much higher reward v risk.

I'm not saying it's good or right, I'm saying it may be the least worst of bad situation. I'm just saying that in most instances people fold companies before it's going to sink them, or if there's a risk of it sinking them, that's why the limited liability system exists. If it didn't nobody would take risk, and the country would not grow, and everyone would be worse off.

£1243 is awful, it really is, but it's better than £0, and in a few month that 1243 would be nearly 2000.

Offering staff interest-free loans sounds great, but if they instead invested the money in growth then there could be more jobs, for more people, and more smaller business to compete against the massive business.

 

[Lightweight]

They don't get the 80% from the government if the guy doesn't start the company though. They get dole, or no job gets created.
The government is banking on the 80% being an investment basically, otherwise the country folds, they hope that most companies survive, so they can claw that back in tax from them and other companies. You don't get to pay tax if you're not employed, if there's nobody left to employ you.

They might not be able to get their hands on 350k liquid cash, to bail out just one of their companies. They might have already been bailing them out or bailing out others? Or they may see it as a massive single liability against one company that is probably just not worth it to them, to risk what they have built up over 20 years or whatever? It may be tiny reward for a big personal risk, which they do not need to take as the company is limited, and they're probably getting on. The staff have a much higher reward v risk.

I'm not saying it's good or right, I'm saying it may be the least worst of bad situation. I'm just saying that in most instances people fold companies before it's going to sink them, or if there's a risk of it sinking them, that's why the limited liability system exists. If it didn't nobody would take risk, and the country would not grow, and everyone would be worse off.

£1243 is awful, it really is, but it's better than £0, and in a few month that 1243 would be nearly 2000.

Offering staff interest-free loans sounds great, but if they instead invested the money in growth then there could be more jobs, for more people, and more smaller business to compete against the massive business.

I must apologise I thought reading your earlier posts you were justifying their actions but reading back through them I think you are only offering their rational for their actions and not excusing the actions.

 

[Andy_W]

Andy_w knowing the little you know from your research and the bits below would you make an interest free loan of 10% of your monthly income to the company?

I've got a subscription to that site It's a minefield for those companies and directors, as Howard is split under three names, which are all these same name, the joys of companies house not having a clue what they're doing. They do this to me too, they have me as three different people and have no interest in collating them.

If I was an employee, in that situation, in this industry, in this pandemic, then yes, and I would do this 100 times out of 100. I would also seek alternate employment if I could find it too, ideally not in this sector or high street retail. The reward (or loss prevention) is very, very high and the risk probably low to medium.

But as an outside bank, then absolutely no way on earth would I even loan them £1, with a 10% return. The risk is high, the reward ver low, and there are safer places to loan or invest money.

As an investor, I would probably look at this as an easy opportunity to get some shares cheap, of a business that seemed to be on the up beforehand.

I think this is what will happen, the loan thing will get retracted and a PI will take over some ownership for a bargain price.

 

[bear66]

Perhaps the company founder could have got a loan from one of the other 12 companies he's a director of.

 

[Andy_W]

I must apologise I thought reading your earlier posts you were justifying their actions but reading back through them I think you are only offering their rational for their actions and not excusing the actions.

That's the basics of it, I'm just saying running a company is extremely complex, and there's probably a million things going on. I think it's been an ill-thought idea and they've not understood what the public implications would be. Had they offered 10% interest to be paid in a year it would have looked much better on paper, although in reality wouldn't have made barely any difference in numbers terms. It wouldn't have went down like a lead balloon though.

It's cashflow, and cashflow is a massive problem that cannot often be solved by loans, as nobody would loan hospitality cashflow unless it was secured against an asset, which they probably already have financed to the hilt. I bet all lines of credit are nearing limits.

 

[Andy_W]

Perhaps the company founder could have got a loan from one of the other 12 companies he's a director of.

It doesn't appear that any of them have anywhere near enough to lend what 10% of 500 staff would be temporarily contributing, and there's no point stripping 12 companies of cash and risk them folding, that's if they have any cash.

If you're lending out money you need to diversify who you lend to, and in small amounts, to reduce risk. What you cant do is pool cash from 12 companies, and pay into one, it's like the exact opposite of what you're meant to do.

It looks to me like every single business they have is liable to big problems with the pandemic, it's all retail, property and leisure, I bet the whole accounts are mess.

 

[Randy]

Perhaps the company founder could have got a loan from one of the other 12 companies he's a director of.

Maths isn't my strong suit so give me a chance.
Say for example every member of staff is on £10 p/h and the company is asking for 10% that works out £80,000 based on each person also working a full 40 hour week (which they won't be). This also doesn't take into consideration the furlough payment, it's assuming full pay.
So you could actually determine that total amount they would be asking for would be less than £80,000.

The full portfolio most be in serious trouble if they are asking staff instead of say, borrowing or downsizing, what is, in the grand scheme of a things a small amount of money.

 

[ForssAwakens]

Assuming they can't get finance (likely)
Assuming the business is unviable or severely weaker without the loan (seems that way)
Assuming that directors do not have to prop up unviable businesses with personal cash (which has been earned and taxed), which are outside the umbrella of the limited company (UK law, and this law encourages people to start businesses and create jobs)

Would you all prefer the business to just fold, and all 500 staff go on the dole?

Haven’t you slammed someone for making assumptions. Going a long way to defend a position you really know jot all about