@roflwofl wrote:
Recently Cheesecake Factory, a big operation, announced 5 days in advance that it could not pay April rent in any of their locations.
I would counter that based on the actions of MS account for Cheesecake, there were some indicators of the company not faring well for years, however....
And yes, businesses have a downturn at times and do sometimes bounce back. I think the 'bad at business' tag seems to set in when someone takes the, "We'll make it up with volume!" approach or continues to fall further behind without making modifications to their business model.
Here's where I take issue with when a business should shutter; If you run a restaurant and are falling behind, you may hit a day when you cannot pay rent. Hopefully you can pay the employees what they are due, close the doors and move on. Perhaps restructure a bit to keep only the most profitable locations open. Yes, some may be out a job, but they will hopefully be covered by EDD for a time and ultimately find new employment.
If you run a small MSC and have come up through the MS business for many years, you understand the dilemma of mystery shoppers well. You probably have a personal relationship with many of them, and know that most count on their reimbursement money and/or small fees to survive. When you hit a point that you are using those reimbursements to pay other bills for your business or yourself, you have crossed a line.
The responsible thing to do is take a business loan, pay your vendors and then made modifications to the business in order to survive, if possible. If you cannot get a loan...then the chances are good that those who are better at modeling business success have already made a determination that your business is not going to succeed. Using shoppers unwittingly as a bank at that point goes beyond bad business. It's cruel and selfish.
I'm not specifically talking about Katy here. This seems to be the model applied to all failing MSC's. I have seen it for years and am disgusted by it, so perhaps the anger I feel when I read about Katy falling behind has built up over years of watching dozens of other companies pull the same crappy move.