Now is, well, not such a great time to be Groupon. Here's the ticker: Groupon's stock is at the low, low price of $6.94 as of press time. What's more, it's an easy time to pick on the company because it seems to be burning, if not also crashing.
Well, here's the thing, though. Reputations are funny because once one rumor spreads, more and more follow. Eventually, it's hard to distinguish fact from rumor and anything could be plausible. What happened last week, though, with Back Alley Waffles in D.C. claiming it went out of business because Groupon didn't pay it the money earned from a daily deal email in a timely fashion, is nudging things in a whole other territory. I wagered that this was probably just another instance of a company blindly hopping on the deal-wagon, and that if it was anyone's fault, it was Back Alley Waffles', or more specifically, its owner, Craig Nelsen.
As it turns out, I was right.
Groupon, unusually, broke its silence regarding media stories sniping at the business, to explain how this wasn't Groupon's fault. Business Insider has the syrupy scoops:
Nelsen struck back again to Business Insider, but I'm not really here to chronicle Wafflegate 2012, but it is interesting that usually Groupon holds back and here it is firing back. (
What's more, Nelsen has been paid. There also have been reports that BAW didn't have a business license. But I digress.) What does that mean for the other cases where it's held silent against other accusations? From Business Insider:
Groupon just gave us its side of the story—that the deal was constructed entirely on owner Craig Nelson's terms, and that he knew the schedule of customer payments before he pulled the trigger on the deal. Mr. Nelsen initially approached Groupon and our merchant advisors structured a deal to best encourage overspend and help his business grow. We also required Back Alley to cap the number of Groupons sold to ensure the feature was in the best interest of both consumers and the merchant. We scheduled his feature on his terms, on a date he selected, under a contract he reviewed and signed.
Anyway. In other news, Toronto-based educational software maker has been "aggressively recruiting" Groupon talent has apparently been scooped up by the company at a clip fast enough to warrant Groupon Deputy General Counsel Matt Miller sending a letter to Top Hat CEO Mike Silagadze to tell him he should kindly stop doing that.
Business
In the letter, Miller says "Top Hat should not be encouraging current or former Groupon employees to breach their [non-solicitation and non-compete] agreements, and Top Hat should not be acting in a way that would be tantamount to contractual interference… we will continue to monitor the situation and will take action if forced to do so."
Thing is, Groupon might have some trouble enforcing those agreements, particularly if they also stipulate employees can't go into unrelated industries.
Regardless, seems like Groupon is striking back. But will it be enough?
David Wolinsky is a freelance writer and a lifelong Chicagoan. In addition to currently serving as an interviewer-writer for Adult Swim, he's also a comedy-writing instructor for Second City. He was the Chicago city editor for The Onion A.V. Club where he provided in-depth daily coverage of this city's bustling arts/entertainment scene for half a decade. When not playing video games for work he's thinking of dashing out to Chicago Diner, Pizano's, or Yummy Yummy. His first career aspirations were to be a game-show host.
