Eat-all-you-can promo sends Chinese resto to bankruptcy
For a restaurant to offer an all-you-can-eat promo it must have sound financials. A hotpot restaurant in China had to learn this the hard way.
After two weeks of offering a month-long all-you-can-eat promo for 120 yuan, or around P1,000, for membership-card holders the Jiamener hotpot restaurant in Chengdu, Sichuan province had to close down.
A report by South China Morning Post showed that Jiamener’s owners incurred a debt of 500,000 yuan (about P4 million) as a result of paying other restaurants to divert excessive customer flow.
The promo proved so popular that customers would line up from 8 a.m and that 500 customers would come on a daily basis.
“We knew we would be losing money [by launching the discount promotion]. We wanted to accumulate more loyal clients through this strategy,” one of the owners said, as cited by the report.