December 15, 2011

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“Mocromatic refrigerated draft beer cooler and taps. These units have 10 taps each. I have 4 of these units and they all work. $1250 each or all 4 for $4500.” So reads one of several ads placed on Chattanooga’s branch of Craigslist last week. And so ends the saga of Fire & Ice, not with a city nuisance order or a courtroom battle, but with an online sale of bar equipment.

The popular—and deeply troubled—downtown nightclub located near the middle of the 800 block of Market Street, had been in the news more than many local politicians during the past two years. Dozens upon dozens of fights and visits from the police had all led to a well-deserved reputation of a “trouble spot” that neither ownership nor management seemed to be able to control.

The problems had become so bad; the city’s Beer Board revoked the club’s license to sell beer (which was held up on a court appeal and injunction). It was set to face the state liquor folks, where it was expected by many that it would lose its ability to sell any type of alcohol, and just last week the city attorney explained to council members how to go about legally closing down the club as a public nuisance.

But the real final straw was a recent early Sunday morning brawl that drew officers from all over the city to deal with multiple fights both inside and outside the club, punctuated with random gunfire. Amazingly, no one was seriously injured, but it finally became obvious to ownership that the end had come. So, last Friday the Craigslist ads went up as the doors closed and neighboring businesses breathed a sigh of relief.

But in all the troubles, the question of how one specific club became such a problem while nearly all of the dozens of other nightclubs, restaurants and bars within a mile of Fire & Ice seemed immune from the mayhem is a lesson in nightclub economics. The restaurant/bar business is a very tough one in which to succeed. Business experts say over more than half of all new restaurants and nightclubs fail within a year of opening their doors; ninety percent fail to survive beyond five years. And the number one reason for their failure? Lack of capital.

There are many options for increasing capital, and the method Fire & Ice used was to hire out-of-state promoters to book edgy musical acts and entertainment guaranteed to draw a specific clientele. A clientele that freely spent money for the entertainment they received. Unfortunately for the owner of Fire & Ice, that clientele was also known for getting out of control far too often. So even while the club was succeeding financially in the short term, the aftereffects of that success were sealing its long-term fate.  

And such is a painful business lesson learned, one that hopefully will be of benefit to current and future entertainment entrepreneurs. For now, though, there are some good deals to be had on Craigslist.

December 15, 2011

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