> “Oh,” my dad said, waving his hand dismissively at the small army, “Everyone knows this coffee shop is owned by loan sharks. It’s probably a money laundering operation.”
A long time ago, I went to a Czech restaurant in San Francisco (I am always interested in finding Czech food, as it is somewhat rare in the US anywhere but where I'm originally from: near Chicago, aka Czech-ago ;P). The food my friend got seemed to be literally microwaved (he said half of it was very cold while the other half of it was very hot), and they were entirely out of at least fruit dumplings I remember for sure but I also think there were a couple other things missing. I definitely remember someone commenting that it felt a bit like a money laundering scheme more so than a restaurant.
Years later (still a while ago... maybe a decade?) I was again in San Francisco, and I went to the same restaurant--I mean, at least it is Czech food, right?! ;P--and now it was in a different much fancier dining area (though I also remember being somewhat difficult to find and sort of almost in a basement; it was just furnished almost ridiculously fancy). I was the only person there, however. This time, their menu didn't have a bunch of options they could be out of: they had exactly three dishes.
There was, however, multiple wait staff at the restaurant, all just kind of doing nothing. I ordered a goulash I think, and it was OK. I mean, I was coming into this expecting it might just be them microwaving frozen scoops of food, and didn't care as, again, "at least it is Czech food". It was tasty enough that I went back the next day for the svickova.
Again, no one was there. They also seemed so confused by how I was there. Now twice in a row. Ordering food off of their menu of only three options ;P. At the end of the dinner, I asked them "do you ever have... fruit dumplings?" and suddenly the guy--who maybe thought I was a cop casing the joint ;P--suddenly had a realization: "are you... Czech?!".
I did not return for a third day ;P. I remember checking and a number of the reviews on whatever review site I was using at this point were also people who stumbled into this restaurant and started to think "how is this even a restaurant? are we sure this isn't a money laundering front?!". That said, it also isn't clear to me how money laundering can work if everyone suspects it at your business!
In that case, the alleged fraud relates to business rates (effectively property taxes). If it was empty, the landlord would have to pay them. If there's a business there, the business is liable .. unless, of course, it simply runs for a while and then vanishes.
There’s a bank near me. It is open usual hours but nobody seems to go there other than employees. Nobody goes through the drive through, nobody in visitor parking, ever.
When I used to work late at night I would drive by there would sometimes be people inside scurrying about.
A couple of months ago I went with a friend of mine to get a kebab in a place we haden't been before.
It was a very large restaurant in an important street of town, and yet it was mostly empty and the kebab was very below average. There were also people talking at a large table and constantly getting food without even ordering.
First thing I said to my friend was: "Yep, sure as hell they're getting the money from somewhere else"
I encountered something similar to this a long time ago in NYC. My friend who keeps tropical fish invited me to tag along with him shopping for interesting new additions to his tank.
We visited a couple in Chinatown that were striking similar to your Czech restaurant: employees kind of surprised to see someone come in the door, one operational fish tank with one or two fish in it amidst a large wall of empty tanks, comically outrageous over the top nobody-would-ever-pay-that-ever-ever prices. Figured it must have been some flavor of money laundering, but it also seemed... too obvious?
There used to be a popular teriyaki place in Seattle that I frequented. Nicknamed "scary terri" because the neighborhood was [still is] notorious for street crime and the clientele were weird. It was always crowded though, the food was cheap and good. It wouldn't seem like a money laundering business by the standard of "but nobody eats here".
Turns out the owner was a fence, buying and selling stolen goods. The police busted them a few years back.
I think this is quite common. Either money laundering or a legitimate front for something else. There was a very good Bosnian restaurant in my town about 15 to 20 years ago, but there was only one waiter, who may also have been the cook, and one half of the restaurant was always slightly darker and always had people who clearly "belonged there" sitting at a table in the corner. Perhaps I'm being unfair and it was just a gathering place for the local community and they decided to make a little money off of it as long as they had it, but it always gave me a weird vibe. In a different town I lived in there was an African restaurant that was never open, but always had two or three people in it drinking coffee. It was there for years and I never once saw it open or empty.
Austrian here. In my experience, good Bohemien food is hard to come by outside of where it's customary. Even in joints that don't seem to be money laundering.
I've had a similar experience with fellow classmates at a small osteria in Vienna we used to frequent when skipping English classes. But the food was actually decent and very cheap. But we never saw any other patrons.
This article is interesting not just because the particular businesses it explores via stories, but because of its broader message to entrepreneurs about the importance of understanding your customers' business models if you want to succeed. Many engineering-focused founders struggle with this part. If you want to actually sell the thing you built (food ordering kiosks in the author's case), you have to align the value proposition with the customer's business model and incentives. This business model and incentive structure might not be what you initially think.
Several large heroin deals went down in London in the early 70s. Tremendously profitable shipments were flowing from Afghanistan. So much so that one of the main problems was laundering those profits. Dozens of restaurants were sustained in Brick Lane by this “custom”, far more restaurants than there were legitimate diners for. After the money-flow dried up, many of them struggled and there were closures. They weren’t sustainable. Only the better ones survived.
> … differentiation strategy of ‘enlightened hospitality’ through a synergistic set of human resource management practices involving three key practices: selection of employees based on emotional capabilities, respectful treatment of employees, and management through a simple set of rules that stimulate complex and intricate behaviours benefiting customers.
So, hire nice people, be fair to them and encourage everybody to treat the customers fairly and kindly?
Maybe just being a good person is good for business?
The OP also explains (partly here and partly in a previous post, linked in the story) how this is not a good strategy for most other restaurants which do not have a wide range of locations, from fast food to fine dining.
> ... encourage everybody to treat the customers fairly and kindly?
Do you believe that is an accurate summary of "management through a simple set of rules that stimulate complex and intricate behaviours benefiting customers"?
The customers in the story had experience that were more than fair and kind. In fact, they are quite remarkable interactions. And the repeatability of remarkableness is not easy.
Very cool piece, one of the most interesting I've read on HN recently. As someone building their first starup in a completely different category (fintech for Africa), many of the high-tier lessons about SOPs still made me think.
The Gramercy Tavern beetle story makes me wonder about this. If you provided unified customer experience in some contexts it's cool. In others, it's creepy. Even if the actual act hasn't changed.
Self mockery, I guess. If you're a fancy restaurant, it implies that you are high end but not arrogant enough to ignore your own mistakes. So, it conveys the message that you are always willing the best for your customers.
It comes down to whether the experience is desired or not.
When multiple people recognize and respond to you, it is a sign of fame and respect. People generally like to be well-known and respected, so this coordination is appreciated.
When a machine recognizes and responds to you, it is often not a sign of respect but a sign of exploitation. I think it's kinda useful when I see relevant ads on a website based on my recent browsing. But I might feel differently if I spent 8 hours a day driving wherever a computer told me to go or cooking whatever a computer told me to cook.
Mh... I've read few articles here and there that essentially, in the more or less explicit background say "cash are a source of evil" while e-cashes might be an answer.
I counter with a simple note: what about a LEGIT company who is just a branch of a parent company in another State, something let's say like a P.O. box in Delaware, a thing perfectly legal there, and the branch company have to pay much service to the mother company ending every year in red or nearly red and so paying no local taxes but still get allowed to remain in business? That's happen ALL by electronic money, officially transferred, officially formally billed according to the laws.
On contrary let's say we only tax the net, so we want to document any expense, even the smallest one, what do you think in this scenario?
The business records a high number of sales (or high value sales) and hence dirty money can be used as clean incoming money.
The high staff numbers indicate either a) staff can accumulate and no-one is really bothered because the normal economics don't apply, or b) more staff implies a bigger business (to anyone looking at the books), which means more money can be laundered without raising suspicion. Efficiency just depends on how much cash you can imply this coffee shop makes, so more staff is a good thing.
I found those stories of "enlightened hospitality" creepy and presumptuous. Don't eavesdrop on my conversations and respect my choices. Are you suggesting my opinions on expensive wine are sour grapes? I didn't want wine or salad. God, I'm happy I don't live in a country where waiters are forced to be a hyper-social adult circus clown to compete for tips.
If you see restaurants as a place to get food, then you're right. If you visit a place to have a remarkable experience, you might enjoy this kind of attention.
Not saying either perspective is wrong. Just that there's some nuance.
> providing excellent service in the F&B business works against the structure of the industry.
I tried to look at the preceeding article mentioned to go deeper on this but it is paywalled. I can't say for sure but this article has wiffs of the quasi-mysticism that surrounds F&B worship of successful professional F&B proprietors. And I'm getting a touch of the worst brand yet which is mixing F&B business metaphorically with startup brain.
So for example, almost all of these articles will talk about how some "culture" is "different". They'll enumerate all the quirky training processes that "bond" the teams together.
But in the end there are a few realities. Most people that have very professional service in F&B pay them more and give them better benefits. They can afford this because they work in niches of F&B service that allow for higher margins. Unless you can move your operations into something higher margin, you can't afford these pay and benefits. And if you do, someone else will fill your low margin hole and end up asking themselves the same questions. Namely, why do my employees hate me? I exploit them. Why do I exploit them? The margins demand it.
The other and much more insidious way that F&B luminaries provide superior service is by exploiting professionalized workers' egos. Essentially, working in a fancy restaurant is very clouty. A lot of people end up working in cutting edge or high end F&B while still earning very marginally improved wages because they believe in the place they work. In my opinion this is not good. This is asking people to start making real personal sacrifices for something they will never actually own, something that will give them nothing the day it slides from under their feet.
The vast majority of F&B is so low margin that I actually think the only conceivable way to pay people a livable wage, outside of high margin niches, is to be unrpofitble. Essentially, you have to distribute the profits to the workers. And the problem here becomes that scale is often the only way to secure yourself in the industry, yet getting capital invested into your explicitly profitless venture is unlikely.
I really wish I could read the other article because maybe I'm preaching to the choir but in the end I'd say, be very cautious about glorify anyone in the F&B business.
These days it feels like almost every major business is a government, bank or drug money laundering operation at its core... What they say is their main business is actually just the front for the operation. The cash cow is money laundering.
While the article functions as an ad for a paid subscription, it contains more than enough substance in itself that bait is not an appropriate description.
Casual HN readers get a very interesting article without banner ads or paywall. People who are interested in more related content are encouraged to pay for a subscription. I don't see much wrong with that.
[+] [-] saurik|3 years ago|reply
A long time ago, I went to a Czech restaurant in San Francisco (I am always interested in finding Czech food, as it is somewhat rare in the US anywhere but where I'm originally from: near Chicago, aka Czech-ago ;P). The food my friend got seemed to be literally microwaved (he said half of it was very cold while the other half of it was very hot), and they were entirely out of at least fruit dumplings I remember for sure but I also think there were a couple other things missing. I definitely remember someone commenting that it felt a bit like a money laundering scheme more so than a restaurant.
Years later (still a while ago... maybe a decade?) I was again in San Francisco, and I went to the same restaurant--I mean, at least it is Czech food, right?! ;P--and now it was in a different much fancier dining area (though I also remember being somewhat difficult to find and sort of almost in a basement; it was just furnished almost ridiculously fancy). I was the only person there, however. This time, their menu didn't have a bunch of options they could be out of: they had exactly three dishes.
There was, however, multiple wait staff at the restaurant, all just kind of doing nothing. I ordered a goulash I think, and it was OK. I mean, I was coming into this expecting it might just be them microwaving frozen scoops of food, and didn't care as, again, "at least it is Czech food". It was tasty enough that I went back the next day for the svickova.
Again, no one was there. They also seemed so confused by how I was there. Now twice in a row. Ordering food off of their menu of only three options ;P. At the end of the dinner, I asked them "do you ever have... fruit dumplings?" and suddenly the guy--who maybe thought I was a cop casing the joint ;P--suddenly had a realization: "are you... Czech?!".
I did not return for a third day ;P. I remember checking and a number of the reviews on whatever review site I was using at this point were also people who stumbled into this restaurant and started to think "how is this even a restaurant? are we sure this isn't a money laundering front?!". That said, it also isn't clear to me how money laundering can work if everyone suspects it at your business!
[+] [-] pjc50|3 years ago|reply
The huge wave of "American Candy" stores in the UK are apparently being investigated: https://www.bbc.co.uk/news/uk-england-london-61777445
In that case, the alleged fraud relates to business rates (effectively property taxes). If it was empty, the landlord would have to pay them. If there's a business there, the business is liable .. unless, of course, it simply runs for a while and then vanishes.
[+] [-] duxup|3 years ago|reply
When I used to work late at night I would drive by there would sometimes be people inside scurrying about.
It has been open for nearly 20 years like this.
[+] [-] ElCheapo|3 years ago|reply
First thing I said to my friend was: "Yep, sure as hell they're getting the money from somewhere else"
[+] [-] macNchz|3 years ago|reply
We visited a couple in Chinatown that were striking similar to your Czech restaurant: employees kind of surprised to see someone come in the door, one operational fish tank with one or two fish in it amidst a large wall of empty tanks, comically outrageous over the top nobody-would-ever-pay-that-ever-ever prices. Figured it must have been some flavor of money laundering, but it also seemed... too obvious?
[+] [-] MichaelCollins|3 years ago|reply
Turns out the owner was a fence, buying and selling stolen goods. The police busted them a few years back.
[+] [-] stinkytaco|3 years ago|reply
[+] [-] michaelgrafl|3 years ago|reply
I've had a similar experience with fellow classmates at a small osteria in Vienna we used to frequent when skipping English classes. But the food was actually decent and very cheap. But we never saw any other patrons.
[+] [-] tptacek|3 years ago|reply
[+] [-] vasco|3 years ago|reply
Did you report this suspicion to any authority? Your answer should be there.
[+] [-] jgerrish|3 years ago|reply
You know, I've never had one of those microwave Velveeta Mac and Cheese cups. But I bet they're pretty good, in terms of guilty pleasures.
Not that I don't want authentic meals and experiences of course.
[+] [-] dpio|3 years ago|reply
[+] [-] mdorazio|3 years ago|reply
[+] [-] nickdothutton|3 years ago|reply
[+] [-] boringg|3 years ago|reply
[+] [-] gadders|3 years ago|reply
https://www.bbc.co.uk/news/uk-england-london-61777445
[+] [-] vlz|3 years ago|reply
So, hire nice people, be fair to them and encourage everybody to treat the customers fairly and kindly?
Maybe just being a good person is good for business?
[+] [-] occamrazor|3 years ago|reply
[+] [-] renewiltord|3 years ago|reply
Do you believe that is an accurate summary of "management through a simple set of rules that stimulate complex and intricate behaviours benefiting customers"?
The customers in the story had experience that were more than fair and kind. In fact, they are quite remarkable interactions. And the repeatability of remarkableness is not easy.
[+] [-] suslik|3 years ago|reply
You say it like this is something well-defined and easily achievable, but I am not sure it is.
[+] [-] caporaltito|3 years ago|reply
[+] [-] possiblelion|3 years ago|reply
[+] [-] Archit3ch|3 years ago|reply
[+] [-] renewiltord|3 years ago|reply
I wonder what separates the two.
[+] [-] caporaltito|3 years ago|reply
Self mockery, I guess. If you're a fancy restaurant, it implies that you are high end but not arrogant enough to ignore your own mistakes. So, it conveys the message that you are always willing the best for your customers.
[+] [-] shimon|3 years ago|reply
When multiple people recognize and respond to you, it is a sign of fame and respect. People generally like to be well-known and respected, so this coordination is appreciated.
When a machine recognizes and responds to you, it is often not a sign of respect but a sign of exploitation. I think it's kinda useful when I see relevant ads on a website based on my recent browsing. But I might feel differently if I spent 8 hours a day driving wherever a computer told me to go or cooking whatever a computer told me to cook.
[+] [-] kkfx|3 years ago|reply
I counter with a simple note: what about a LEGIT company who is just a branch of a parent company in another State, something let's say like a P.O. box in Delaware, a thing perfectly legal there, and the branch company have to pay much service to the mother company ending every year in red or nearly red and so paying no local taxes but still get allowed to remain in business? That's happen ALL by electronic money, officially transferred, officially formally billed according to the laws.
On contrary let's say we only tax the net, so we want to document any expense, even the smallest one, what do you think in this scenario?
[+] [-] empiricus|3 years ago|reply
[+] [-] jayceedenton|3 years ago|reply
The high staff numbers indicate either a) staff can accumulate and no-one is really bothered because the normal economics don't apply, or b) more staff implies a bigger business (to anyone looking at the books), which means more money can be laundered without raising suspicion. Efficiency just depends on how much cash you can imply this coffee shop makes, so more staff is a good thing.
[+] [-] ozim|3 years ago|reply
Efficient money laundering will get you caught. Incentive is not to get caught and not having all the money seized.
[+] [-] chickenimprint|3 years ago|reply
[+] [-] LeonB|3 years ago|reply
At the end he says:
> ‘for the record I’d rather a waiter say, “Have a nice day” and not mean it, than ignore me and mean it.‘
[1] https://time.com/3720218/difference-between-american-british...
[+] [-] michaelgrafl|3 years ago|reply
Not saying either perspective is wrong. Just that there's some nuance.
[+] [-] boringg|3 years ago|reply
Good service in North America heightens the whole dinner experience.
Incentives are everything.
[+] [-] unknown|3 years ago|reply
[deleted]
[+] [-] DubiousPusher|3 years ago|reply
I tried to look at the preceeding article mentioned to go deeper on this but it is paywalled. I can't say for sure but this article has wiffs of the quasi-mysticism that surrounds F&B worship of successful professional F&B proprietors. And I'm getting a touch of the worst brand yet which is mixing F&B business metaphorically with startup brain.
So for example, almost all of these articles will talk about how some "culture" is "different". They'll enumerate all the quirky training processes that "bond" the teams together.
But in the end there are a few realities. Most people that have very professional service in F&B pay them more and give them better benefits. They can afford this because they work in niches of F&B service that allow for higher margins. Unless you can move your operations into something higher margin, you can't afford these pay and benefits. And if you do, someone else will fill your low margin hole and end up asking themselves the same questions. Namely, why do my employees hate me? I exploit them. Why do I exploit them? The margins demand it.
The other and much more insidious way that F&B luminaries provide superior service is by exploiting professionalized workers' egos. Essentially, working in a fancy restaurant is very clouty. A lot of people end up working in cutting edge or high end F&B while still earning very marginally improved wages because they believe in the place they work. In my opinion this is not good. This is asking people to start making real personal sacrifices for something they will never actually own, something that will give them nothing the day it slides from under their feet.
The vast majority of F&B is so low margin that I actually think the only conceivable way to pay people a livable wage, outside of high margin niches, is to be unrpofitble. Essentially, you have to distribute the profits to the workers. And the problem here becomes that scale is often the only way to secure yourself in the industry, yet getting capital invested into your explicitly profitless venture is unlikely.
I really wish I could read the other article because maybe I'm preaching to the choir but in the end I'd say, be very cautious about glorify anyone in the F&B business.
[+] [-] bazoom42|3 years ago|reply
[+] [-] MichaelCollins|3 years ago|reply
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