Posted by Bob on November 29, 1998 at 23:27:17:
In Reply to: Re: Any experiences with Transmedia? posted by Carl on May 04, 1998 at 23:24:50:
: : Transmedia is like the plague - avoid it. It brings in a kind of clientele that is not interested in dining - they just want cheap food. Perhaps there are some good folks that use transmedia - but they never came to the restaurants I worked in... But if you need some cash flow here's a solution. Although I couldn't imagine why your friend would want to subject himself (or herself)) to this if he is just opening. Hopefully he budgeted carefully and still has money for expenses and pr for a little while. I forget exactly how transmedia works. I think it is something like they give you 1,000 and you owe 1,500 in food credits. Most restaurants operate on low profit percentages. And with all the agrevation why lose profit? Sorry this post is poorly written... just got back from driving all over the place... Francois
: what is transmedia? is this like a coupon club where you offer discounts to card holders?
: i hate that crap! only failing restaurants resort to doing the buy one get one free clubs
: and that usually finishes them off.....
:Transmedia is essentially a very high risk loan with imputed interest rates that should be considered illegal. Payback on the loan is generally 100% and payments are generated by cardcarrying members who dine at your establishment (at a discount). All proceeds from these sales go to transmedia - less tip and tax. You cannot control the payment amount or the payback period. For a new business, these are not factors you want leave to chance. Projections of cashflows can be seriously impacted with a high influx of Transmedia customers. My advice is to steer clear of Transmedia. Almost any other form of financing would be cheaper.