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Stashs' Sudden Closing Cost Local Coupon Co. $16,000

Bobby Dubin worked with a Deerfield-based WeDeal.com to sell discounts to his three Highland Park restaurants, asking for 90 percent of the profit up front. Two weeks later, he closed them all.

Bobby Dubin surprised many this week when he closed his three restaurants — Stashs, 2nd Street Bistro and 2nd Street Enoteca.

One person he especially caught off guard was Jordan Heller, the founder and CEO of Deerfield-based WeDeal.com.

The news meant that Heller had just lost about $16,000.

Heller believes he was intentionally swindled. Dubin says he simply ran out of money when he thought he could hold on a little longer.

'He told me what I needed to hear'

Much like Groupon, WeDeal.com is an online company that offers coupons for discounted goods, services and food. It started in 2010 and has offered almost 1,400 deals since then, many for Highland Park restaurants like Once Upon a Bagel, La Casa de Isaac and Moishe, Michael's and Norton's.

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Heller had long wanted to work with Dubin because of Stashs long history in Highland Park. In early October, he got that chance, when Dubin agreed to meet.

"We've never run 2nd Street or Stashs," Heller told Patch on Thursday. "It's one we always wanted to do."

Dubin met with Heller's sales team and laid out unsually hefty demands, according to Heller: all of his payment up front and a much higher-than-normal percentage of the split. Dubin told the sales team that he was in talks with Groupon and if WeDeal.com refused he would go to them instead, Heller said.

"He played it like he was playing us against the bigger competition," Heller said. "He wanted to give us the edge as long as we met the demands."

A red flag popped up in Heller's head as he heard Dubin's demands, because he was asking for so much so soon. But Stashs' long-standing history in Highland Park assuaged his concerns and he agreed to the deal.

The three deals (one per restaurant) ran starting the week of Oct. 21. One ran that Wednesday, another on Friday and the last one the following Monday. About 1,000 WeDeals sold for all three restaurants.

On Nov. 1, Heller cut Dubin a check for $5,951.82, which was 90 percent of what he was owed. Soon after, Heller heard a rumor that Stashs might close. He called Dubin.

"He told me business wasn't great but he wasn't going anywhere," Heller said. "He told me what I needed to hear."

Less than two weeks later, Dubin closed all three restaurants.

'I just ran out of money'

WeDeal.com will refund everyone who purchased a coupon to any of Dubin's restaurants, putting Heller's losses at $15,651, he said, not including the man hours needed to refund each of the customers who purchased the deal.

"We're really only five people here and we have a mountain of work to dig our way out," Heller said. 

Matt Shaffer, a 10-year Highland Park resident, was one of about a thousand people to buy a WeDeal. He bought his to the Bistro.

"They take half the money and then they close," Shaffer said. "It looks really, really bad."

But, in a short interview on Thursday, Dubin said that he had no intention of closing the restaurants so soon after signing the contracts with WeDeal. Business had been falling off, beginning with what Dubin called "the most unbelievable slide" this past summer. He hoped to make it into the new year, as January used to be good for his restaurants.

"I just ran out of money," Dubin said. "There was nothing to buy anything with."

Dubin said business this past September was a third of what it had been normally. He hoped to get loaned some money from people he knew, but those fell through.

"We tried up until the very end to get more money," Dubin said. "It just didn't happen."

In hindsight, Heller is sure that Dubin knew going into the deal that he would be closing his restaurants soon after WeDeal paid him. 

"He played us," Heller said.

Dubin points out that it was WeDeal that came to him, and said that his own financial loss in his restaurants over the past 10 years has been about $800,000. Dubin said it didn't make sense that he would trick a company out of a few thousand dollars when he had already lost hundreds of thousands.

"There's no truth in it," Dubin said. "There was no intention of closing."

Heller isn't convinced. And Dubin isn't returning his phone calls, Heller said. 

"If it wasn't premeditated, he would give me the check back," Heller said.

He's calling what happened fraud and is dealing with an attorney to see how he can recover his money.

"We have three signed contracts with him," Heller said. "We can come after him if he does not fulfill his end of the bargain."

'A black eye to the restaurant business'

Heller believes that Dubin chose WeDeal.com because the local company is smaller than the giants like Groupon or LivingSocial that might be quicker to fight back.

"He could have potentially taken one of the bigger guys, but maybe he thought, 'Screw the local little guy I know I can milk them,'" Heller said.

The WeDeal CEO is kicking himself for agreeing to the deal with Dubin, calling the decision "foolhardy" in light of Dubin's demands.

But it's not just the financial hit that upsets Heller. There's the damage to his customers' trust in his company, and to their faith in Highland Park restaurants.

"Customer trust, merchant trust, it just gives the whole industry a little bit of a black eye," Heller said. "This business is tough on its own without having predatory practice."

Dubin, who ended the interview because he was walking into a meeting with his lawyer, did not mention if he would be returning the money to WeDeal. It sounded like at this point that might not even be possible.

"I lost everything," he said.

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Mrs. H November 16, 2012 at 02:28 PM
Typical

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