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Bad Business???

I work in a resturant that is locally owned, it's a chain, but not a really big one. And I'm starting to think that our owners and general manager really have NO sense of business. For starters, everyone that signs up for our birhtday coupons gets three coupons in the mail. One free 16'' sandwhich (value 11$), buy one pizza get one free (no limit) and buy one item get one item free (also no limit). And not only do people sign up for these coupons, but we automatically send them out to everyone who lives within a mile radius of the store. When someone has a complaint instead of just sending them a coupon for a free pizza or something, the manager sends them 20$ in gift cards! And she wants us to go door to door handing out menues and 5$ gift cards. This store is purging money in coupons and it's insane. Last night we did over 1000$ in sales, and over 400$ of that was gift cards.

Answer Question

Asked by Anonymous at 9:45 AM on May. 1, 2010 in Just for Fun

Answers (5)
  • Holy Cow!!!! They're going to go under! You can't keep doing that! It'd probably be a 50% off cupon for your birthday and that's it! Wow....

    Answer by Anonymous at 9:54 AM on May. 1, 2010

  • Sonds like a KITCHEN NIGHTMARE to me. CHEF RAMSEY, you are being called!!!!!! 911

    Answer by GMMOLLY at 10:18 AM on May. 1, 2010

  • if it's a chain, there's a good chance that corporate pays for advertising. gift cards are a huge money maker because only 30% of people will actually use them. many of them will be re-gifted, which brings in new customers. a 16'' large cheese pizza (in my family restaurant) only costs $1.14 to make. they're trying to establish local clientele. if you hook the locals, you can reel in others through word of mouth. it's not bad business, it's small business. you have to get personal with people when you're competing for business.


    Answer by Anonymous at 10:18 AM on May. 1, 2010

  • It's not as insane as you think. The profit in food service is huge. Since a good bit of coupons never get used, all you are wasting is the paper they are printed on and it has the general public talking about what a generous restaurant you are, which is the best form of advertising you can have. They may not be making the best profit possible, but as long as they are meeting the bottom line and building customer loyalty, they will be fine.

    Answer by CorrinaWithrow at 10:22 AM on May. 1, 2010

  • OP here: actually it cost our store 500$ a month just to print the coupons. And right now we ARE losing money. You can not run a resturant on 1000$ a day and then have 400$ of that be in free food. our food is really expensive (12 in cheese pizza for 15$ anyone??) so people get teh coupons and that's all they do. They don't even usally buy drinks (2$). They come in get their free sandwhich and leave, and don't come back until the next year when they get another coupon.

    Answer by Anonymous at 10:55 AM on May. 1, 2010

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