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Wafflegate: How One Local Business Caused a News Feeding Frenzy

by Borderstan.com July 26, 2012 at 10:00 am 1,140 4 Comments

From Ashley Lusk and Mike Kohn. Check out Ashley’s blog, Metropoetrylis, find her on Twitter @arlusk or email her at ashley[AT]borderstan.com. Find Mike on Twitter at @mike_kohn or send him an email at mike[AT]borderstan.com.


Wafflegate: How one local business and Groupon started a news feeding frenzy (Luis Gomez Photos)

We recently learned about the closing of Back Alley Waffles as the news broke on Monday.

However, more surprising than the closing of the establishment is how owner Craig Nelsen informed clients of the restaurant’s closing. Nelsen posted a sign on the door stating that the business went under due to the “bloodthirsty business practices of Groupon.”

It didn’t take long for a picture of that sign to go live and for the news and accusations to start flying, as bloggers, neighbors and local papers worked to get to the bottom of the story.

Admittedly, we personally were among the masses with an initial reaction to side with the much-admired local business, over the aggressive and very large company, Groupon. But as the day went on, and the articles and interviews came out, the full-story unraveled, leaving all initial reactions (including our own) a bit one-sided.

Jessica Sidman at Washington City Paper reached out to Nelsen and was met with no response. Readers of the article, however, quickly contributed comments, blaming Nelsen’s voluntary participation in the Groupon model and his signature of acceptance of their terms.

“I doubt one lone Groupon offer could sink a whole business,” wrote one commenter in the article’s comments. “Surely there were some other financial problems and the owner is conveniently blaming all his problems on Groupon. Any prudent owner would have contacted any of the thousands of other small business owners who have participated in Groupon deals to understand how the payment process worked.”

Nelsen, himself, responded to these comments in The City Paper article and merely incited more responses against his position.

“I opened the waffle shop because I was struggling financially with my art gallery, so, yes, I was under-capitalized from the outset,” wrote Nelsen. “And, yes, I should have read the fine print on the contract, just like I should read the fine print on my Comcast contract.”

Tuesday morning, Business Insider was able to reach Nelsen for an extensive comment on the nature of Groupon’s business, and it published the story right away. Later, however, the story unfolded further as Business Insider” confirmed Groupon’s side of the story, complete with actual numbers and financial terms.

It is regrettable that Back Alley Waffles will no longer be serving steaming waffles along Blagdon Alley. But even more regrettable is the feeding frenzy and blame game that we, as reporters, bloggers and concerned neighborhood residents sometimes play.

Here at Borderstan, we love our small and local businesses — they are what keep our neighborhood unique and thriving, and we make an effort to cover them and profile local businesses. But at the end of the day, we, as well as other publications, are in the business of informing people, not taking sides.

These days, there is a fine line in journalism between delivering news quickly and delivering the whole story accurately — and supporting our local businesses, which form the backbone of our community and commercial corridors. We hope we can continue to keep our balance on that fine line, and keep our readers abreast of the latest community news — including local businesses.

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  • Chelsea

    I’m really pleased to see Borderstan uphold the ideals of good journalism – remaining agnostic and impartial and waiting for the full story before partaking of the said “frenzy.” Great coverage of not only both parties involved, but the media coverage as well.

  • karen

    thanks Borderstan. At the end of the day, we are still left without a good waffle. We had been to Back Alley Waffles on a couple of occasions…and part of the charm was certainly the owner….the homemade butter, the art. Perhaps there is a way to rememdy the situation and reduce the current $450 price tag, and broker a deal with Groupon (though they do not appear to have any obligation). One thought might be to restrice the groupon purchasers to 5/week…until all the groupon coupons are honored.

  • read the follow-up on dcist – he didn’t even have a business license for this restaurant.

    the guy was flouting the rules from the get-go. he has no one to blame but himself for his shoddy understanding of how to legitimately run a business.

  • At the end of the day, almost invariably, the failure or success of an entrepreneur is tied to what stares back in the mirror. We like to blame externalities for our failures, but really, we have nobody but ourselves to blame. While it’s easy to tape up some screed on your door blaming “the man,” it’s much more difficult to do a true self-assessment and figure out where the problem lay. Kudos to Borderstan for ferreting out the core problems: undercapitalization, not reading contracts, etc.

    I’m also going to go out on a limb and say when did Groupon become the big, bad bully? Nobody has guns to their heads to sign Groupon deals. Weren’t they somebody’s local small business as recently as November 2008?


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