A cautionary tale every restaurant owner should hear

A lot of people are looking to create their businesses, and chefs especially are looking to start their restaurants. However, not all companies get off the ground, and some fail due to unplanned circumstances. One is a very unique situation, however, where the success of a restaurant’s services was the primary reason behind the company’s bankruptcy.

What caused this to take place? It was an “all you can eat restaurant,” one of those restaurants that charge a predetermined amount, and then you can take as much food as you desire. In most cases, this isn’t a significant problem as most people won’t consume more than the price they pay. It’s almost like a gimmick, in a way. However, there was an issue in which some customers were sharing their credit cards, which enabled customers to purchase food.

The cards were distributed among entire families and even friends, which meant that for just $25, a whole family could eat what they’d like. The company was serving 500 customers daily when they announced their All You Can Eat menu. However, the amount earned was compensated by the money spent to provide the food. The blunder caused them to lose so much money that, in their first 30 days, they had paid off $100,000.

The company’s failure created such a huge impact that Chinese social media was raging over the issue. A user posted, “Customers can eat till they go bankrupt,” and another said, “never underestimate the power of a Chinese appetite.”

This is an excellent illustration of how you can take a business to the ground with no knowledge of what you’re doing. Many companies like this are in other countries and typically have customers pay at the front desk, meaning that everyone pays their way; however, this particular business opted for the use of a credit card system that the customers easily abused. With the card, it was possible to verify the name on the card against the identity of the individual, but they did not even try to do that.

There is one thing for certain: the business owner has learned their lesson. In the present, it’s possible to conclude that this entire incident has brought light to the way that a lack of innovative thinking can destroy an enterprise.