Percentage Lease On Strip Club / Strictly Cash Business ?
How would i even go about accounting what is coming in? Stay in the strip club all day, watch outside and count how many people come in and out?

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They are raking in a hell of a profit, buying new cars and this, that, and the other, so it is obviously doing great. In the coming year I plan on doing a percentage lease, but this being all cash, and me not being able to trust some on word alone.,I need a way to get a concrete analysis of what is really coming in. How would I go about doing this?
[{"id": "f7kmfmr", "text": "If the IRS has difficulty nailing down these businesses\u2019 income, do you really think you can do a better job?  It seems like this would be very difficult to enforce and your current strategies of hanging out in there all day or monitoring the door (probably best to do that with an external camera), could be viewed as being somewhat disruptive to their business.  It\u2019s ok to be honest with us here: is the real reason you want to do this so that you can hang out there all day? \ud83d\ude00\n\nI feel like that would then only encourage them to leave and try and find a new location once the next lease term expires.  That being said, it\u2019s pretty difficult for a strip club to move locations for obvious reasons, so you may be able to hold them hostage and agree to your terms.  \n\nHave you run this by them in a high level discussion?  What was their reaction and would they even agree to this?\n\nMy suggestion would be to try and get their historical financials (unlikely they will provide them unless you already have a clause in their existing lease) and see if that level of rent, based on your targeted % rent, is enough for you.  That\u2019s probably the best you can do.", "replies": [], "depth": 1}, {"id": "f7kn12i", "text": "Are they paying a reasonable amount? if they are gone from there, who is coming to replace them? do you want to deal with new strip club owners? are they causing problems? don't be greedy. They are running a difficult business, and if they are ok and the money is ok for the owner, don't overthink it.", "replies": [], "depth": 1}, {"id": "f7krlk5", "text": "Just request a copy of their sales tax or first page of income tax returns.  If they will lie to the IRS, they will lie to you.  Relying on their tax reporting as a basis for percentage rent is really the best you are going to do.", "replies": [], "depth": 1}, {"id": "f7ksebo", "text": "Do you want to be a landlord, or a business partner?  The latter is basically what you are requesting and based on your comments you wouldn\u2019t trust these tenants enough to enter into a business relationship with them. So why structure a lease that way?  \n\nIf you want to take a gamble, do all the analysis you\u2019re talking about and structure rent based on that estimate. But you run the risk of them finding a new location with a more reasonable landlord if they think your offer is unfair. \n\nAs someone else said...the lease is worth what someone else will pay for it. No more.", "replies": [], "depth": 1}, {"id": "f7kuv6l", "text": "Just ask for a VIP table and a stack of cash once a month", "replies": [{"id": "f7l672c", "text": "Hell ya.", "replies": [], "depth": 2}], "depth": 1}, {"id": "f7kx3w0", "text": "You should have an audit right in a percentage lease deal. That usually is what keeps people honest (somewhat).", "replies": [], "depth": 1}, {"id": "f7l1rmt", "text": "I would recommend you reconsider. The club owners make their money two to three ways. One is alcohol sales. It's easy to audit because you can look at how much they buy to know how much they sell. Two is cover charge. Audit by tracking the number of customers in the front door. Three is house fees paid by the dancers. If its a flat fee, you can get copies of work schedules and audit by the number of people on the schedule. If its a percentage deal, than you'll have no way of ever knowing what actually comes in the door. All in all I'd never consider a percentage rent deal with a club like this because it's got a lot of liability baked in.", "replies": [], "depth": 1}, {"id": "f7l83x9", "text": "Almost, sound like you jealous because they're making money and now you want in on there business. Smh...Why not just go up on the rent?", "replies": [], "depth": 1}, {"id": "f7l8cce", "text": "You should avoid a percentage rent clauses on a cash heavy business unless you have a lot of confidence that the operators are going to be 100% upfront about it. I have been in arguments and seen errors in percentage rent accounting between Fortune 500 companies. I can't imagine the headaches of dealing with a small tenant on this.", "replies": [], "depth": 1}, {"id": "f7l9ldm", "text": "Use their tax return. Will be the best chance you have, they wouldn't be dumb enough to declare revenue more to you than they would to the IRS.", "replies": [], "depth": 1}, {"id": "f7le4oq", "text": "Raise their rent enough to make it worth your trouble and move on with your life. Sitting outside of a strip club for days isn\u2019t going to help you understand how much money they\u2019re making anyway. You don\u2019t know what customers are spending and you don\u2019t know what the owners expenses are. How they spend their personal earnings is not your business. Cash businesses underreport to to the IRS and they will certainly underreport to you.", "replies": [], "depth": 1}, {"id": "f7le5cu", "text": "Lol! Being a commercial land lord is not about stripping your clients of their profit. You are hilarious, be careful not to lose a great +20 year steady client.", "replies": [], "depth": 1}, {"id": "f7lkmgg", "text": "My solution for you?  Sell the property altogether and let someone with better business sense take over.", "replies": [], "depth": 1}]