Chinese Restaurant Goes Bankrupt in 11 Days After Offering All-You-Can-Eat Deal
A hot pot restaurant in Chengdu, the capital of southwestern China’s Sichuan province, went bankrupt in less than two weeks after people discovered a loophole in its all-you-can-eat membership card.
Jiamen’er, the restaurant known for its spicy style hot pot, launched the deal on June 1 where they offered customers the chance to avail their membership card, which costs 120 yuan ($18). The deal will allow them to eat as much as they want given that they pay for the monthly payment fee.
This move was supposed to be a savior for the restaurant, which was already poorly performing business when it opened in December, co-founder Su Zhe said according to Chengdu Commercial Newspaper via People’s Daily Online.
At first, the deal showed a bit of hope for the business as the promo attracted many customers, according to Daily Mail. At some point, it even attracted more than 500 a day, which led to increased hours for workers at the restaurant.
But it turns out, aside from how hard it is to sustain the business, these customers also found a loophole in their membership card.
Some of them abused the system and stayed inside the restaurant for a whole day. Others, however, lent their membership cards to other people without paying for it or their meal.
This loophole – or mistake – proved to be quite difficult to control as waiters weren’t able to stop the cardholders from eating there due to the fact that the cards didn’t have any photo identification of the owner.
“The key cause of the failure was that we hadn’t used the facial-recognition system,” one of the shareholders of the restaurant told The Paper.
After launching the promotion and selling the cards to about 1,700 members, Jiamen’er ended with a whopping 500,000 yuan ($77,326) debt in just 11 days of operation.
Many of its members were surprised when they found out that the restaurant decided to close its operation and shut it down for good on June 13.
Instead of beating himself up about it, Su said that this mistake would make a good lesson for them. He also added that this wouldn’t stop him from opening another restaurant anytime soon.
“The main problem was our low management skills. This is a heavy lesson.”