A waffle restaurant in Washington, D.C. has gone under, and is blaming Groupon for its financial woes.
Back Alley Waffles, which opened in April, said it was forced to shutter its doors because of Groupon’s sluggish reimbursement plan, co-owner Craig Nelsen claims.
His site now advertises $450 waffles to make up for the lack of money flowing in, saying that he’d ‘rather have my hand slammed in a car door than honour your Groupon coupons.’
The restaurant, which was located in the Shaw neighbourhood of Washington, boasted a simple menu of fluffy waffles and fresh fruit smoothies, as well as coffees and chai. But because of Groupon’s reimbursement policy, Mr Nelsen lamented: ‘After taking a big chunk of the money as its share, Groupon holds onto the business’ share, using it while the business waits. And waits. And waits,’ according to Washington City Paper’s Young & Hungry blog, which first reported the story.
Mr Nelsen said that he waited about a month for the first of three payments, saying that the money was issued as a check rather than being deposited electronically into a bank account. The check, he said, then arrived by snail mail.
But, he said, all of his operating costs – buying ingredients, paying rent and his employees – were due up front, meaning that Mr Nelsen had to put money he didn’t get until months later to pay for running his business.
Groupon spokeswoman Julie Mossler told MailOnline in a statement: 'Mr Nelsen initially approached Groupon and our merchant advisors structured a deal to best encourage overspend and help his business grow.
‘We also required Back Alley to cap the number of Groupons sold to ensure the feature was in the best interest of both consumers and the merchant. We scheduled his feature on his terms, on a date he selected, under a contract he reviewed and signed. According to our records, only 132 Groupons, or 18 per cent sold, have been redeemed since Back Alley ran two months ago, and Mr Nelson has received 2/3 of his share of the revenue to date.
‘We always hate to hear that a local business has decided to close, but the math does not point to Groupon as the cause.'
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