Example #2

Introduction:

For confidentiality reasons, Plato Estates is unable to disclose the name or the location of the following example of work that was undertaken during 2006/7.

A large well know national car retailer represented a major European franchise in a number of locations where it owned the freehold in properties that represented this franchise.

The retailer had a long established principal of corporate social responsibility though was experiencing financial pressure to dispose of its car retail interests. The retailer was able to sell some of its properties as a going concern retaining the prevailing franchises to others but was left with a 1.45 acre site where both the manufacturer did not wish the franchise to continue and the retailer had no obvious alternative use. In view of their corporate social responsibility policy the retailer wished to dispose of the business as a going concern and needed someone to acquire the premises who could retain the existing staff and bring a new franchise to the premises.

The solution by Plato Estates Limited:

Plato Estates was able to draw upon its knowledge and contact base with other car retailers and franchises and established that there was at least one other major franchisor seeking representation in the area. Unfortunately, it became apparent that the franchise that was available would not support the size of the premises being disposed of by the client. Plato Estates made a proposal to the client on the following terms:

  • Plato Estates made an offer to buy the business (as opposed to the property) from the client and to take on all personnel, pension obligations and other liabilities within the business.
  • Plato Estates then agreed that it would introduce the new franchise to the premises & established Heads of Terms with the new franchisor that their franchise would only involve representation on approximately 0.8 acres of the site but which would enable the majority of all key personnel previously employed by the client to be retained in the new dealership.
  • If there were to be any reductions in staff numbers, Plato Estates would honour any existing contracts of employment, redundancies etc.
  • Plato Estates would demolish those parts of the original dealership that would be surplus to requirement of the new franchise.
  • Plato Estates had entered into negotiations with the Local Planning Authority for redevelopment of the surplus land involving 0.7 acres for the development of a terrace of trade counter units that Plato Estates would then let to other contacts it had that might also prove to complement the restructured dealership & neighbouring activities.
  • These trade counter units provisionally were targeted at providing a tyre & exhaust/fast fit operation, windscreen repair, car valeting & car audio retail.

Conclusion

The solution provided by Plato Estates enabled the client to honour its corporate social responsibility policy, to dispose of its premises without incurring any redundancies and to ensure that an ongoing business operation prevailed, which also satisfied a second European franchisor who had a requirement in the same area whilst also providing a development / investment opportunity for Plato Estates.