Never Count your Chickens...

From the venereal New York Times which has bankruptcy issues itself: A Chef Sells Customers on Providing Him Capital.

DESPERATE times call for desperate measures.

That’s why John Halko is offering customers of his hole-in-the-wall organic restaurant here a chance to invest — kind of — in his business through what he calls V.I.P. cards. The cards, ranging in value from $500 to $10,000, guarantee buyers discounted meals for years to come. He has sold two dozen cards, one for $10,000, earning about $16,000.

But Mr. Halko, 40, who spent much of his career as a chef with companies that cater to film crews on location, said he had found it maddening to expand. He wants to open a 50-seat restaurant and lounge in leased space across the street that would also offer liquor and wine and periodically feature entertainers. He has spent $100,000 on renovations for the new space, money he got with a home equity loan on his house. He is trying to obtain an additional $150,000, and so far two banks, Hudson Valley and Commerce, have turned him down, he said.

And he is also offering the V.I.P. gift cards, which will allow customers to eat at both locations free until they consume the face value of the card plus 20 percent. The arrangement, he said, feels better than asking those customers for a flat-out loan.

Meanwhile, he has had to grapple with another economic predicament: business at Comfort is down — perhaps 10 percent.

“It’s been crunch time for the past 8 to 10 months,” he said. “People are not spending money like they used to.”

$10K is ludicrous. Even if you went there once a week, and spent $200 on each trip, you'd take more than a year to get a return on your money. Assuming the place survives which given the owner's fiscal decision to "expand" during a recession makes the entire proposition absurd.

File this under moronic!