Agree 100%. Also, based on his menu, he made another critical error in using promotions like Groupon: no room to upsell. He's charging $8 for waffles (which may not even be that high in his DC neighborhood), but undercharging for coffee and doesn't appear to have any further upsells.
As an example, mimosas go great with waffles and can run up a tab quite quickly. Alcohol is usually excluded from such promotions, so this is an opportunity to reclaim immediate margin.
Edit: Yes, getting a liquor license costs time and money. So does running a successful restaurant. I was pointing out that running such a promotion requires preparation. He could also make his margin selling waffle toppings, sausage, and grits. Any way the merchant can get the average ticket well above the Groupon's cap is a way to stay in the black; liquor is just one way to do that. If a restauranteur isn't ready for scale, Groupon is not going to work.
And a medium drip at Starbucks is over $2 everywhere in Atlanta (where I live). I'd be surprised if prices are lower in higher-priced D.C.
Selling mimosas requires a liquor license, which isn't easy to get. It's unlikely that a hole-in-the wall waffle joint would have one.
Since when is $2 undercharging for a coffee? Even starbuck's doesn't charge that much.
The guy should have made a mistake, but arguably the Groupon model needs to work for little businesses like this if they're going to take over the world.
Maybe, offer a basic cup of joe for $1 and a fancy organic, gourmet, free-trade coffee for $3.50 in a nice coffee press. It really depends on the part of town and the typical type of clients.
As an example, mimosas go great with waffles and can run up a tab quite quickly. Alcohol is usually excluded from such promotions, so this is an opportunity to reclaim immediate margin.
Edit: Yes, getting a liquor license costs time and money. So does running a successful restaurant. I was pointing out that running such a promotion requires preparation. He could also make his margin selling waffle toppings, sausage, and grits. Any way the merchant can get the average ticket well above the Groupon's cap is a way to stay in the black; liquor is just one way to do that. If a restauranteur isn't ready for scale, Groupon is not going to work.
And a medium drip at Starbucks is over $2 everywhere in Atlanta (where I live). I'd be surprised if prices are lower in higher-priced D.C.