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Is Groupon to blame for DC waffle restaurant closing?

wafflesdc.jpg

Waffles similar to those that were served at Back Alley Waffles in Washington, D.C. (iStock)

Did Groupon put a Washington D.C. waffle joint out of business?

That’s what Back Alley Waffles claims after being forced to shut its doors after only three months in business.  The restaurant wrote on its website that they were forced to shutter “indefinitely due to the bloodthirsty business practices of [G]roupon.”    

“I can no longer afford to sell waffles for $8.00 and still pay, for example, my employees something north of a subsistence wage,” Back Alley said in a notice on its site.  It adds that waffles will be available by appointment only for $450 each.    

Back Alley said it laid out money up front for food and staff to get Groupon customers.  It says Groupon agreed to send the business’ share of the profits in three installments, but the restaurant said that the checks took longer than expected and the company dragged out the check processing.

“It takes roughly a month for Groupon to send the (deeply discounted) payment for the waffles those customers ate. And even then its (sic) only half or less of what is owed. The business has to wait for most of the remainder of its money until two months after laying out the cost of the food and labor. And for some of the money, it will be three months after honoring the customer's Groupon coupon in the shop before the business is paid for that customer.”

Groupon says that it required Back Alley to cap the number of Groupon coupons so that the deal benefited all parties involved, adding that Back Alley Waffles co-owner Craig Nelsen reviewed and signed the contract.  

“According to our records, only 132 Groupons, or 18 %  sold, have been redeemed since Back Alley ran two months ago,” said Groupon spokesperson Julie Mossler in a statement emailed to FoxNews.com. “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."