NEW YORK (TheStreet) -- What's happening in small business today?
1. A botched Groupon could destroy this small business. Modern Wellness Spa says a botched daily deal by Groupon (GRPN) could force the closing of its business. Groupon is withholding payment to the Hallandale, Fla.-based business, and threatened to sue the small business when it said it could no longer afford to honor the discounted deal, according to a report the spa gave to the Huffington Post.
This is not the first small business to experience late payments from Groupon.
The public company is also suffering from a falling stock price on an uncertain earnings outlook and what is becoming known as "daily deals fatigue" among consumers -- the New York Times highlighted this "syndrome" last week when Groupon reported quarterly results.The dispute is a two-edged sword for Modern Wellness. The business says Groupon owes its $2,700 from used deals, but if they discontinue honoring the deals, customers are likely to go online and post bad reviews of the spa. Groupon tells a different story. A Groupon spokesman said the daily deal site is withholding payment due to too few deals redeemed, in addition to users reporting unsatisfactory spa experiences and asking for refunds, HuffPo reports. 2. Who are the real heroes of this economy? Small businesses and franchisees are the real heroes of the economy because they put their savings and entire livelihoods on the line by running their own business, says Jim Amos, chairman and CEO of Tasti D-Lite and Planet Smoothie, in an interview on Fox News with Greta Van Susteren. In a transcribed excerpt from Van Susteren's interview, Amos reiterates the problems caused by a lack of access to capital for many franchisees and business owners. "Historically, the organic growth of franchising has come from these people, these business folks, that we're talking about, who brought 10% to 20% of their savings to the table. They often financed about 80% out of the net worth in their home. And today, if any banks are lending, and they are not, they want 40% or 50% down, and there is no equity in anybody's home, practically," Amos says. "So if you're looking at the franchisers who are attempting to scale and drive business in the United States, that becomes extraordinarily difficult. If you're looking at the franchisee who just wants to pursue their dream, it's almost impossible," he says. 3. Green energy startups turning toxic for investors. Falling energy prices and dialed-back government assistance for so-called green energy businesses are causing investors to rethink putting money into the sector, according to CNNMoney. Specifically, a historic slide in natural gas prices is hurting the competitiveness of alternative energy as well as proposed budget cuts that would result in lower government assistance for wind farms, solar panel manufacturers, ethanol producers and makers of alternative fuel cars, CNNMoney says. Some investors are responding by refusing to lend to green energy companies, especially startups, unless they can prove they can be profitable on their own, the article says. -- Written by Laurie Kulikowski in New York. Follow @LKulikowski To contact Laurie Kulikowski, send an email to: Laurie.Kulikowski@thestreet.com. >To submit a news tip, email: email@example.com.
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