Is Groupon Responsible for This Waffle Restaurant Shutting Down?
Back Alley Waffles spent only three months in business before closing, and they're blaming deals site Groupon.
The whole story is there on the Back Alley Waffles site, which now includes a missive against Groupon.
Due to the shocking business practices of an obscenity known as "Groupon"—contemptible even by the nearly non-existent standards of the modern corporation—I can no longer afford to sell waffles for $8.00 and still pay, for example, my employees something north of a subsistence wage.
Waffles will now cost $450 and are served by appointment only. This is probably a joke, but feel free to inquire if you've got a lot of cash to burn. Just don't try to use that deal you purchased: "I'd rather have my hand slammed in a car door than honor your Groupon coupons."
For those not in the know, Groupon makes deals with restaurants to distribute coupons. Customers buy coupons from the site, Groupon sends the restaurant a check, and deal-crazy customers flock to the restaurant, bringing up business and increasing profits overall. Well, theoretically.
According to the Back Alley Waffles site, the problem with Groupon is that it takes way too long for the restaurants to see any money.
After about a month, Groupon issues the first of three payments to the business. By check. Then it has to "process" the check, which can take up to ten days. Then it snail mails the check. A month later, the process is repeated for your next installment. Then, a month later, the process is repeated again for your final installment.
That means that while Back Alley Waffles was honoring these deals, they weren't making enough money to pay for their supplies or their employees.
The Huffington Post's Bonnie Kavoussi points out that Back Alley Waffles isn't the first restaurant to complain about Groupon. Last year, one restaurant owner called using the deals site "the worst decision [she] ever made."
And there are sure to be more outcries in the future: a Rice University study shows that Groupon isn't a good idea for everyone. Daily deals are only sustainable for about 30 percent of businesses, or a slightly more optimistic 40 percent for newer businesses.
Back Alley Waffles must have been part of that other 60 percent.