"I always thought there should be a safe place to eat for people with food allergies," Kunkle said.
She opened Food for All in September 2010 and enjoyed modest success serving meals and selling hard-to-find products for allergy sufferers.
Then Groupon called. The deal-of-the-day site, an Internet sensation that has spawned hundreds of competitors, suggested a simple pitch that its salesperson said had worked for lots of other small businesses: sell a $30 coupon for $15.
It took only 48 hours to drive a stake into the heart of her fledgling business, Kunkle said in an interview. In just two days in mid-May, Groupon sold 450 of the $30 coupons on her behalf, good for purchases any time in the next three months.
By August, Kunkle realized her campaign had been a mistake. She had hoped the coupons would add to her regular clientele, and that people would spend more than the $30 coupon's face value.
"That's not what happened," she said. "It was really people in it for the deal who were not coming back."
Kunkle said Groupon's sales rep didn't mention that she could cap the number of coupons she sold, which would have at least stemmed her losses. (Groupon did not return phone calls Thursday.)
As she netted just $7.50 for each $30 coupon, after Groupon's cut, she figures her loss at close to $10,000.
That was enough to trigger a death spiral. She took out a high-interest loan in August to replenish depleted stock, and all through the fall robbed Peter to pay Paul. By early this month, she was ready to call it quits.
But then what the Internet took, it gave back.
