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I am a Software Developer by profession and I have been avoiding Banking and Insurance sector jobs because of Riba. Also ignoring those companies who are developing softwares specifically for Banking or for insurance companies.
Recently I accepted the job offer after doing a lot of research and after a week training on company’s Business model I found out that there is a small element of interest calculation in the software I will be working on.
Nature of Company's Business: manufacturer of industrial tools and household hardware and security products and locks. (I.e. drill machines, screw drivers and etc.).
How does Company make money: Company sells tools to franchisees who then sells them to car mechanics in garages.
How Franchisees do transactions: Franchisee (seller) will be given a territory and he will have let’s say 125 garages to visit every week for sale. It’s up to franchisee how he controls and run his business but he will have to operate within his territory.
He has option to sell the tool on cash (one transaction) or on weekly instalments.
Is there any Interest involved when franchisee is dealing with mechanics or customers? In UK there is no interest at all but in USA , franchisee can charge interest.
Eaxmple of Business Model: For an example, I work in the garage and I have to buy my own tools to work on cars. Tool selling guy (franchisee) come to my garage and show me different products, I like the tool which costs £1000 but I don’t have a full amount to pay straight away. So franchisee will offer me a weekly payment option in which I will pay around £20 a week and I can use the tool straight away. It’s basically my own tool now. If I like the tool which is not in his van then I will ask him to order it for me which he can sell to me on around 35% margin.
How to become a Franchisee
Self-Finance: Franchisee will get the maximum discount when he place an order
Bank Loan: Company will help franchisee to get 70% loan from the Bank but franchisee will get minimum discount when he place an order.
What will i be doing
Company has already designed the software for franchisees to order new items, to control their stock, to manage their customer account and to manage the weekly payments. I am working for UK branch where franchisees don’t charge interest, and my role is to support and further develop this application for franchisees.
Can I work for this company? who sells tool to franchisees and has a software which has ability to calculating interest rate? It is up to franchisees whether he charge interest or not.
I have following concerns: 1- The Nature of company’s business is selling tools which is fine but they do help franchisees to get loan from the bank. 2- I will be based in UK where interest is not part of any transaction but franchisees in USA can charge interest. 3- My role is to fix bugs in the application and add more functionality to the current system which will not be related to interest (as I have mentioned this to my line manager that I will not work on interest related projects and he is happy with it.)
Can I work for this company?