What do you think about this lease agreement?

the driver isn't buying himself a job, this guys dad is buying a job for him !! no control of load choice, fueling, etc... sure, but none of the work involved in setting all that up either.

IMO, first off your dad should pay the insurance, it's still his authority, his company, right ? for one, I think he has to legally, obviously, I'm no lawyer.

$2400/month seems okay for a new truck, but what happens three or four years from now ? Is that driver still happy to pay $2400/month ? I think you either have to trade it in every 2 years or else give him some kind of payoff option.

fuel seems okay, he pays it, your dad takes it out of his settlements. fine, I really think in this situation as an independent contractor your pops should make it easier on himself and just let the guy handle fuel on his end.

I think your dad's percentage is too low. 76-85% is standard and that usually is for a guy who owns or finances his own truck, has his own plates, and still has to negotiate for loads and do his own bookkeeping. I can't possibly see why your dad would do all this work for the guy, front all the money, and then give him more than 75%, but it doesn't look like you have the best paying freight to split profits off of either.

 

I think it's a bad idea. Your Dad would be better off making that $20k as a Walmart greeter and forego the headaches trying to make what will certainly turn out to be less than that operating as a carrier with authority with one single lease to own operator. Mind you, I'm not knocking your Dad's business talent or the credibility of your numbers. But the truth is that the $20k profit you forecast has few upside opportunities and some really big downside risks. To be honest, the only thing that would make that business plan appealing to me (from your Dad's perspective) would be some sort of enormous upside and it just isn't there with this deal. About the only benefit I see to this arrangement versus just hiring the guy is being in a better position to skirt employment tax contributions. And frankly, that little savings barely puts a nick in the risk.

I'll share TAK12LLC's soap box a little on the work ethic topic. Successful people have a hunger for success. They'll do what's got to be done to make it work, which usually includes some substantial personal sacrifice. Whether that means less regular home time, doing truck repairs in the rain, eating ramen noodles, and the like. They do what it takes and don't just give up and quit when things don't go well. Oddly the ones that do that will then point their finger at everyone else but themselves. You can put together the most sophisticated lease to own program for this guy, and at the end of the day, all he has to do is walk away and your Dad owns all the risk. When that happens, the fancy contract will be as valuable as the paper it's printed on.

I also like what TAK says about perception. That is, what you consider hard work versus what someone else thinks. I learned a long time ago in another industry that if you judge someone's capabilities against what you're personally capable of, or willing to do, you will nearly always be disappointed. Goes back to that hunger thing. Most folks are just wired to do less and settle for whatever that brings their way. Nothing inherently wrong with that, although expecting a different outcome at the risk of your money would be ill advised.