Andrew Z closed?

http://www.toledofreepress.com/2010/09/30/levis-commons-shuts-down-andrew-z-restaurant/

Makes you wonder why anyone would get into the restaurant business.

The one downtown was closed on a recent Friday at 1 pm when I walked past.

I see now the article says the DT location was closed for performance issues.

Defiance closed also

I'm not surprised. When I went in to have lunch at the downtown location, the service was awful. After waiting for 45 mins on a personal pan pizza, I asked for a refund. My pizza had not yet even been made or put in the oven.

I went to Jimmy Johns and got fed within 5 minutes.

Sad really. I would love more restaurants downtown, and I was excited about the pizzeria. The food looked good and smelled promising. Unfortunately, I never got to try it because of the massive wait.

Is this the time to say "I told you so"?

I have a family member who worked there; she told me over the summer that none of the employees had been paid for months. I am not sure of the reason for this, I just know what I was told...

I wonder how his new hair salon will fare? I have heard not-so-good reviews...

justphillips has typical Toledo mentality. They just love to see failure yet complain about our economy. What have you tried lately?

I took quite a shellacking with regard to Andrew Z.'s place on Toledo Talk a few months ago after I had the audacity: a) to point out the high failure rate of restaurants; and b) to point out the high failure rate of restaurants built around the name of a local celebrity.

Oh, the howls of protest from Andrew Z.'s fans, who praised the job creation efforts of this local business owner and how his pizza was so excellent that he would never hurt for customers. While I never jump for joy at a business failing (even one owned by Andrew Z., a guy who has taken potshots on his radio show at me for some journalism work over the years) I have to say it: I told you so.

The restaurant business in general and the pizza business in particular are notorious for crushing well intentioned entrepreneurs (myself included; my own five-restauarnt mini-empire imploded at the end of the 1990s). You need a lot more than a good idea and a good pizza: you need sh'loads of cash to ride out the first two years, and you have to pray that sudden market changes do not kill your business (for me, it was the local appearance of a new national chain in Papa John's plus a sudden spike in cheese prices that slaughtered my already thin margins and sent me $15K-$20K a month in the red).

Historymike - don't use bold. We go into some other dimension when u do that.

Heh - only when people forget to use the closing bold tags.

Wait just a minute Molsonator. I did some looking around and in January justphillips posted this about the restaurant:

Had it today and was not even close to a fan of it. Very expensive, especially the half moon mozzarella sticks. Three of them for $7, and they weren't even big. O'well at least I gave it a shot. posted by justphillips on Jan 02, 2010 at 06:34:57 pm #

However, that's a far cry from any post that would entitle the young poster to log an "I told you so" comment today. It's foolish for a college student to profess superior knowledge of a marketplace by writing a post that predicts the past. That's bullshit justphillips. Point to
Molsonator.

Z deserves credit for trying.

The story has been updated to include one more grisley detail: Zepeda's mom used her retirement money to finance the restaurant.

History Mike has walked the walk and actually did issue warning of the fickle business on this site. Mike, you can use that "I T Y S" phrase. That being said, the bold was a little much for my tastes.

Thanks, jimavolt, and you too know your stuff when it comes to the difficulties of the restaurant business. That being said, I have to say now that losing all my cash (plus over one million in potential and real liabilities) was the best thing that ever happened to me. Being forced to go broke caused me to reassess my life, and I chose a career path (teaching history) that is infinitely more interesting and meaningful to me.

And to Andrew Z.: these may seem like dark days, but in a few years you will understand why God wanted you to go down the path of business failure. Losing one's life savings and the business you created sucks worse than most life traumas, but you leave the wreckage wiser, more humble, and ultimately the life lessons pay strange dividends down the road.

That is, provided you are ready to learn from the hard lessons. It took me a couple of years to understand this.

That's what he gets for taking financial advise from Brian Wilson.

I'm also a typical city employee that just sits around while taking your lovely tax dollars :)

historymike:

What chain of Toledo area pizza stores did you once own ?

Fox Toledo News --- Landlord Evicts Andrew Z's Pizza

http://www.youtube.com/watch?v=l9IgYagC9V8

Sad to see it closed, hopefully he can make it work and reopen. At least the Levis one.

Charles: HM use to own 5 Little Caesars and is the Father of the Hot and Ready :)

WTOL.com is reporting this morning that his General Manager has been accused of stealing $50,000 cash this summer:

http://www.wtol.com/Global/story.asp?S=13249245

Due diligence when hiring, especially anyone who will access to cash and make day to day decisions impacting the business is critical. Spend the money and have background checks performed, fingerprinting, etc.

Checks and balances so no one person can control the money or hide it. Two signatures for expenditures, deposits, etc.

There is commercial insurance coverage available for that exposure - and at a relatively inexpensive premium.

Let's hope that Andrew Z's insurance agent at least offered him the coverage - and documented that he did so.

Paying more than $11,000 a month in rent for the Perrysburg location is INSANE.

Even if Andrew somehow scrapes together the money to get the doors open again, the business model doesn't seem like it's sustainable......long term.

I guess he was thinking "high risk, high reward". Levi's Commons is a great location with lots of foot traffic and visibility, but at (as you said) an insanely high price. Especially for a stand alone restaurant without "brother" restaurants down the chain to lean on while you build a customer base. Maybe he can start up in a vacant location somewhere a little less pricy.

In any case, I hope AZ legally hammers his former GM so hard the dirty thief bounces. Goddamn I hate thieves...

I am willing to bet the money stolen will never be recuperated. Most of the crooks that end up in restaurant management have no assets, and once that cash is out the door, it is as good as gone. Someone might get some jail time, but that's about it. Default judgment and bankruptcy for the thief, as usual.

Hopefully Z can pull through this, the pizza was excellent and the garlic balls were to die for.

I unfortunately have a considerable amount of experience in dealing with thieving employees, and brainswell is right: collecting restitution is a royal pain in the arse, and you are lucky to get even 10 cents on the dollar.

With regard to Andrew Z.'s insurance, some insurers do not require a conviction to collect on losses while others do. Also, Andrew Z. will need substantial proof to get the insurer to pay out, and there may be clauses that limit or prohibit his ability to collect based upon his company meeting fiduciary responsibilities and general accounting standards. If the insurer can successfully argue that there was a lack of oversight, he might not be able to collect even on a policy with theft coverage. Also, there is a difference between theft coverage and employee dishonesty coverage: many insurance policies specifically omit theft by employees in theft coverage, and you have to purchase a policy that specifically covers employee theft.

What I find troubling is the vagueness and of the theft claim: the news accounts indicate the losses are somewhere between $50 and $70K, and Andrew Z. did not learn about it until he received notices of unpaid bills. If I am reading this correctly, it sounds like Andrew Z. directed his general manager to control the checkbook, which is a financial nightmare: you always want to keep a degree of separation between operations and finance/accounting. If the person managing sales is also the person controlling the bookkeeping, you have a recipe for disaster. If the story is true as reported, the suspect was likely cooking the books as well as the pizzas, and unraveling the embezzlement scheme might be quite difficult to demonstrate to the satisfaction of the police and the insurance company.

If I am reading this correctly, it sounds like Andrew Z. directed his general manager to control the checkbook, which is a financial nightmare: you always want to keep a degree of separation between operations and finance/accounting.

Amen to that...but, unless you were schooled either through a degree program or through life experience, you don't think about these things. I think AZ just got schooled by life experience and won't make that mistake again when he opens up a new place. I understand he's a busy guy with a morning radio show and commitments to keep, and I can understand how he wouldn't want to deal with the "numbers" after an 8 hour day at the radio station. You need some trusted back-up, which he did not get from this a-hole.

You put your trust in someone and they do this to you over money. Restaurant work is hard work, but I'm sure this GM was not unfairly compensated. Stealing--just pathetic.

Let me jump in here and say something seems a little fishy about the stolen money story. It comes up the same day as his doors are closed? And it seems Hill Partners must have given him some time to catch up. I can't believe they would shut him down for not making an advanced payment for the month (October). My guess is his hole is pretty deep. A lot of people are going to be upset with him when they don't get paid but he has his radio show reputation to save.

One news station website said he is supposed to make $2,500 per week payments to catch up, another says $1,500 per week... one says those payments are supposed to start in October. The other said they were supposed to start in September. One site says $50K was stolen.. another says $70K. One site even names the former manager in question.

Who knows what is really going on.

historymike - you are dead on accurate with the insurance coverage details. Sounds like you've been down that road before.....

The real message within my post was:

"Let's hope that Andrew Z's insurance agent at least offered him the coverage - and documented that he did so."

Experience tells us that Andrew Z monitors TT - at least he did at one point in the past.

Can ANYTHING happen in this town without tin foil hat wearing conspiracy theorists puking their pabulum?

Ryan must be in on it.

Isn't glee on somewhere?

Maybe the GM who stole the $$$$ can go to Cornerstone and be forgiven

Pizza, tin foil crowd, Glee, Cornerstone. Somehow the dog warden is a part of this too.

Foodie: yes, I was burned many times by a variety of schemes and thieves, and insurers tend to get less willing to pay on theft claims as the claims rise in value. In this case, the amount of losses leads me to believe that the alleged embezzler was stealing bank deposits, which is one of the oldest scams in the book. It is also the most difficult to pin on one suspect, especially if there are multiple employees responsible for banking, and it can go undetected for quite a while, since the paper trail is harder to follow than, say, an employee that writes himself an unauthorized check or creates a fraudulent electronic funds transfer.

Of course, there could be plenty of other ways in which the money was embezzled, and the alleged thief could have been using multiple scams, but businesses that handle large amounts of cash are especially prone to embezzlement via bank deposits that mysteriously disappear.

I had this scam perpetrated on me several times in my two decades in the restaurant business, and it is quite challenging to nail one suspect in this scenario. The accused will typically blame other managers, the owners, the bank tellers, and anyone else who had access to the money, and the police will eventually move on to other cases, since the pool of possible suspects is so large. Unfortunately, though $50K is a lot of money to you and me, this is relatively small potatoes in the justice system, and Andrew Z. will be lucky if this case ever results in criminal charges being filed.

Working against him is the fact that this alleged embezzlement happened months ago. Records may be lost or destroyed, memories will be fuzzy, and time works against criminal investigations. The times in which I was successful in getting a thief prosecuted were the ones in which there was immediate detection of the crime and there were witnesses. If the alleged perp ran his scam undetetected for months, and no one actually saw him steal funds, it will be very difficult to get the prosecutor to move on criminal charges.

HM, you owned Little Ceasars? Man they used to be the BEST back then!

Yeppers - I was an LC franchisee locally for about a decade. I made plenty of mistakes, but as INeedCoffee noted, my stores did originate the Hot-N-Ready marketing campaign. Originally we put people in costumes in front of the store to attract attention (I only had one Little Caesar Man costume, so we had a Viking, a gorilla, and a few other get-ups). We got into trouble with the city once when one of the managers sent out an attractive female employee in a bikini; the cops told us that this was a traffic hazard.

The Hot n Ready was a great idea. Although I think nowadays they let stuff lay around too long because I know a few people including myself that have gotten sick after eating one.

LC was THE best waaaaay back when .......they used to have the large pizza parlors that served beer and had the "follow the bouncing red ball" sing alongs projected on a big screen.

Today, sadly, they taste much like the box they come in.

The article hinted he would try to reopen today, guessing either at Levis or someplace else. Anyone have an update? My ex and I are going out to dinner and would like to go if they're reopened.

He seemed adamant about opening today, but how would that be possible?

Bro, why you hanging with the ex?

"We got into trouble with the city once when one of the managers sent out an attractive female employee in a bikini"

Well, that does give an entirely new spin on the phrase "Hot 'N' Ready"......

I'm sure that was a traffic hazzard, but only to sick dogs like me.

I have no clue how Andrew Z. thinks he can get a "temporary" facility open in 72 hours. Just scheduling the health department to inspect the place might take longer than that, as this would be considered a new facility, and the opening health inspection is quite a hurdle to get past. Does he really think he can move all of his equipment, furnishings, and supplies to a new spot and reassemble his restaurant in three days?

Also, while I am not picking on Andrew Z. here, I would be less than enthusiastic about dining in a "temporary" location, and it looks like his ex-landlord has no intentions of letting him back in the space. That "temporary" location could wind up being a permanent one, andit would be a logistical nightmare for Andrew Z. to even attempt a three-day relocation. The fastest I have seen restaurant relocation occur was about a week, and that was with months of planning, prepping the new site and moving the equipment on an orderly timetable. Heck, he will need at least 12 hours just to get his ovens cool enough for a human being to be able to handle them for a move. Add to this the electrical, gas, and water connections, setting up utlility accounts, getting the insurance agent to visit the site, and the myriad government forms needed to open a new business.

And do not get me started on the craziness of transferring a liquor license. That process takes months, even with a well paid lawyer who knows the Byzantine workings of the Ohio Liquor Control Commission.

Of course, it is possible that Andrew Z. has an old pizzeria in mind for his temporary move. Perhaps he plans to simply throw his signs on an existing location with equipment left behind by the previous owner. If this is the case, he also inherits the old location's history of doomed businesses, what we used to call a "death spot." Some locations just suck, and yet there will be no shortage of entrepreneurs who think that hopping in an old pizza shop with the equipment intact is an esay way to make a buck.

Finally, what landlord is going to want to rent to Andrew Z. after his very public troubles? By his own admission he is behind on his rent, and he has admitted to the media that he made a ton of rookie business mistakes. If I had a space, it might be better to keep it vacant than to take a chance on someone whose recent entreprenurial history is less than stellar.

Also the reputation of the place takes a hit and then nobody shows up. Trying it a second time when the first didn't work - Kinda like INeedCoffee with his Ex.

Did Andrew Z voluntarily close his other 2 locations ?

I'm not buying this story about someone stealing $50,000 from him.

I am pretty sure he doesn’t care if you buy it or not. Doubt very highly he would accuse (and in turn police investigate) some innocent person.

Ryan - whas there a quote from the Perrysburg police that they are investigating? I tried to find it but couldn't.

Foodie....are you sure the bouncing ball was at Little Cesaers? I know it was at Shakey's..

Yup. Little Caesar's and Shakey's both had them.

Used to be one such location at the old Food Town Plaza in Point Place.

Historymike - after watching the Fox news piece, when they quoted Z as saying "he hoped to open his business today in another location" - do you think he honestly forgot all the details he had to go through to open a restaurant ( remember he was quoted as saying he learned a lot) or do you think he lied to keep his image up? The audacity of the statement is alarming. Ryan your thoughts?

it's really not easy to open a restaurant. he would have had to be palling the new location for months and months

planning. no palling. palling is not a word. sorry

Interesting the comments section of this.

http://www.toledofreepress.com/2010/09/30/levis-commons-shuts-down-andrew-z-restaurant/

It's unfortunate that his mom invested money in to his business, with money from her retirement fund.

Quote from Toledo Free Press -
"On Oct 1., Zepeda will ask the court for a temporary order allowing him to reenter and continue operating his business, Harvey said.

Zepeda hopes to have a temporary location opened by 5 p.m. on Oct. 1 so his employees can continue to make money.

“In this economy everyone is living paycheck to paycheck and they can’t afford to be without a paycheck so my job despite these out of town guys that don’t get it… we’re going to be open tomorrow if I can do anything about it,” he said.

First paragraph contradicts second paragraph. Either TFP is wrong on the quote or Z is throwing out anything that sticks.

Also third paragraph is blaming someone else "out of town guys". Didn't he already say he missed his payments? Hmm.

Like dudes, check his Facebook page.

"Stay tuned for updates on new location and grand opening!"

well i'm glad he's staying positive

Temporary location...are they reopening in a lock-it-up self storage

Molsonator: I think "lied" is a strong word, since this is all in flux and I think Andrew Z. honestly wants to reopen. However, his image is very important, both to any chances he has at reopening a restaurant and (more importantly) to his image as a local media celebrity. Perhaps writing off his comments as "spin" is more accurate, since Andrew Z. seems to be serious about at least wanting to reopen.

A few other thoughts came to me as I drove to and from Detroit this evening:

1. While he listed his mother as the principal investor, I suspect there are other investors, as you would have trouble building even a carryout-only Little Caesars in a vanilla box for $150K or so (by comparison, a new McDonald's will run you about a cool million to build and start up). I have not set foot in Andrew Z.'s place (I meant to, but got busy, and now they are gone) but it is my understanding that he completely remodeled the space after the last tenant, and I would be surprised if he opened for much less than a half million. I could be wrong though: maybe he remodeled on the cheap and used much of the previous tenant's fixtures, sticking only to cosmetic and equipment changes.

2. If Andrew Z. is correct in his claims that every employee has been paid to the last nickel, he will have nothing to worry about in terms of bad PR from ex-workers (it is always a media frenzy to find disgruntled former workers in a story like this). However, there is a persistent poster on the TFP site who claims inside knowledge of employees getting stiffed. If this is so, I would imagine that only a few days would need to pass for angry ex-employees to start coming out of the woodwork to complain to the media.

3. The sudden closing of the business means that Andrew Z.'s business likely has a ton of accounts payable coming due with no revenue to pay the bills. Just throwing out a few hypothetical numbers, but he was probably doing at least $40K a week in sales, so his accounts payable was probably somewhere around $100K-$130K a month (not including rent and amortization on any loans). Given the fact that he was three months behind on the rent, the business probably pushed accounts payable as well, resulting in an especially ugly accounts payable turnover ratio. He could very quickly find himself with hundreds of thousands of dollars in unpaid bills, taxes, and wages coming due with zero cash rolling in. Anyways, Andrew Z. is going to have to figure out how to keep dozens of vendors from suing him while somehow pulling off a miracle in relocating the business to a viable location. And remember: those vendors are going to want cash terms if they ever do business with him again, so wave bye-bye to the 14-day or 30-day float he has enjoyed when he opened accounts with his food and supply vendors (plus the utility companies).

I don't know how to feel about this.
I did see him on one news channel and he acted like he was going to cry over his employee's email message that said, "I'm with you". But no tears came out.
Second, was this bad business or really a stolen funds type of deal?
Last, I don't know, but could you really not know that you are behind 3 months on your rent when he seemed to be so "hands-on" with pizza delivery and such?

I can't decide whether to feel bad and offer some help, or just pick up the closest rock and throw it.

Andrew Z. mentioned on the TFP site that he is now planning to open the relocated pizzeria "by the end of the month" as opposed to today. If he is able to pull this off, at least he is now being realistic about a relocation timeline.

I also got a look at the site via the virtual tour, and I would somewhat revise down the construction numbers I guessed at earlier. The decor is fairly sparse, and heavy on lower cost items like beer signs and plasma TVs. I doubt that he spent more than a few grand on the tables, chairs, and booths, and it looks like he was using a relatively affordable Middleby Marshall gas oven (you can pick up a refurbished double decker for $15K or so). Based on what I saw, $300K-$400K might be a better estimate at construction, assuming that he was able to inherit items like a walkin cooler, dish sinks, and restrooms from the landlord/prior tenant.

That being said, I was surprised at the comparatively small number of tables and booths. It looks like there are 25-30 tables plus the bar seating, meaning a total occupancy of 150 guests or so at peak times. That sounds like a lot of bodies, but with an $11K rent, he would really need to be turning tables fast to generate the kind of sales he needs to meet that kind of overhead.

Dr. Mike you knowledge truly impresses me :) and hope Mr. Z can incorporate that knowledge. In the end despite previous TT/radio issues, I truly hope he succeeds. Not only cause I enjoy the unique food but having meet him 2-3 times I respect him so far as a man. I trust him.

Ryan and others, my ex is my ex-fiance. I was the bad guy and broke it off almost literatlly a year from now "Oak Harbor Apple Fest".

In the past year a LOT has changed. A lot of our differences, that I and she thought were hard are kinda pale now.

Heck I'm 32. Just this year, so many things come into comparison. When it comes down to it I never stopped loving her, or her family. Heck her sis kids still call me uncle Josh :)

Not to sound cliche, but the Tornado really put it into perspective. I was with another girl at the time. Any my "ex" literally lives a couple 1k feet from lake.. That night I almost had a nervous breakdown and all I could think about was her and her family.

Was right then I realise the small stuff is just BS. What really matter and the various things we had done for each other is really what matters.

Heck she drove 3 states away just to be with me when my grandfather (practically father) died, and I hit a truly low point in my life.

Made me truly evaluate life. Guess a Tornado is a truly horrible thing,but I guess it sometimes takes such things to put things into perspective. We're working out our "now" minor differences.

Hoping this time next year to post as Mr/Mrs INeedCoffee :)

INeedCoffee:

After 25 years in the restaurant business, I can't help but sound knowledgeable: I lived and breathed restaurants most of my life, and as a restaurant owner for most of the decade of the 1990s I learned business and life lessons that will continue to resonate.

Also, as someone who also graduated from the proverbial school of hard knocks, I know painfully well the experience of having to throw in the towel. Ending my run as a franchisee sucked worse than anything in my life to that point, and my identity was so wrapped up in being a business owner that I struggled for a few years to figure out what the hell I was going to do with my life. Ultimately, there was a silver lining in the mix, and I spent the last decade going back to school and reinventing myself. I can now see God's purposes for sending me down the path of business failure, and while I hated the process of failing, I am in an infinitely better place because I lost most of my money and had to start over.

Hockeyfan:

I believe Andrew Z.'s story, as I know from experience how quickly a thief (or pack of thieves) can insinuate themselves in your business. We hired a manager once who talked an excellent game in the interview, but he had a coke problem, and I think he burned us for about $8-$10K in six weeks or so. He was crafty, he was intelligent, and he knew some tricks that I had never seen before. In this case there was no way I was going to be able to prove his scams to the satisfaction of the police or prosecutors, a scheme that involved exploiting a weakness in our computer system (he hacked out of the POS software, went into DOS, and deleted sales records, essentially making $150-$200 a shift disappear).

In another case (one of the few I successfully managed to get prosecuted) a 17-year-old kid found another weakness in our POS system and stole $1100 over three days. This was easier to prove, since the paper trail ioncluded his employee ID number being connected to the fraudulent transactions (he used a coupon button to reduce a bunch of sales to ridiculously low numbers, like $0.01). However, it was plea bargained down to disorderly conduct plus restitution, and I spent 40-50 hours of my life simply to watch my own money come trickling back in $50 at a time. Oh, and I received a $3 check from the prosecutor for showing up as a witness. Yippee!

Then there are your garden variety thieves, the nickel-and-dime people who steal amounts low enough to fly under your radar. They get you for $20 here, $50 there, and probably end up being a bigger drain on your business than the super-greedy crooks. These people are extremely difficult to catch, especially if they know a few tricks and mix up their methods. One day they will take a few bucks from the till, the next day they will under-ring a sale, then next week they will void a sale. When there is no easily identifiable pattern and all you know is that sales are kind of down from expectations, it becomes difficult to pinpoint the exact source of the problem.

The difficulty Andrew Z. faces is being able to prove his exact losses and getting the police/prosecutor to move against the suspect. Again, I have no direct knowledge of the specifics of Andrew Z.'s case, but based on my own experiences in getting burned by crooks I know that this is fairly widespread in cash-based businesses (these days credit card sales can also be opportunities for theft, so I think we need a new term, but this is the traditional description).

Also, given the high volume of losses, the insurer will be maddeningly slow to cough up on his claim, and as we discussed earlier, there may be factors that even cause his insurer to deny the claim. As a parallel example, if an auto owner leaves his keys in the ignition of his brand new 2010 Hummer and it gets stolen, the insurer might choose to activate clauses in the policy about negligence. You have a responsibility to secure your vehicle and not make it easy for thieves, and I fear that Andrew Z. might be facing a similar uphill battle in getting his insurer to pay out on his claim. He had fiduciary responsibilities as business owner to make a good faith effort to protect his company's financial well being, and if he handed over operations, accounting, and finance to the same person, he almost invited trouble. An insurer might deny the claim on the basis that Andrew Z. acted in a negligent fashion to protect his own interests.

And then there is the issue of theft versus employee dishonesty, as many policies specifically exclude employee embezzlement from theft coverage. If this is the case, there is no recourse from the insurer, and no amount of sobbing or hand-wringing will get an insurer to pay on a claim that is contrary to the policy. The first time I got burned by an employee I learned the hard way about this critical difference, and after that experience I made sure that employee dishonesty was a rider on every business policy I purchased. If Andrew Z. lacked employee dishonesty coverage, he is royally screwed, because all he can count on is court-ordered restitution. Try getting even a nickel from someone locked in jail, or from someone who starts working under the table to avoid garnishments. In my experience restitution is almost unenforceable, and you end up having to spend a ton of unpaid time chasing these lowlifes around.

Theiving employees can get into you for ton of money - quick. We had one clerk play the lottery on our lottery machine for approximately $7,000 PER DAY for three days before we caught on to how she was hiding the sales. Did you know that you can play thousands in less than two minutes? Actually it could have been much, much worse than it was. We prosecuted and got some restitution, but only of the sales she could actually be seen playing on the machine when the view wasn't blocked on the store cameras. I'd like to ring her neck to this day.

Ugh - been there, done that, holland. I owned a carryout with the lottery and we had employees burn us on the scratch-offs. Fortunately it was never more than a few hundred dollars, but this of course is revenue taken away from an already marginal business.

historymike has it correct. There isn't employee dishonesty coverage. Your only possibility is bonding your employees. That's costly and not all employee positions are bondable. Some job positions are too risky for the bonding insureres to offer coverage.

Employee theft is such a big issue for small businesses. I've lost count of how many times I have heard stories from owners about how a key employee, one who had worked for them for 20 years, came to Thanksgiving dinner, babysit their kids, etc. turned out to be a thief. Even worse are the ones where the thief in question is a family member and the business is faced with the choice of whether to recoup the loss but having their brother or son go to jail. Makes you wonder how many times the theft is never detected at all....

Sadly, I honestly believe that just about all employees, if presented with the opportunity, will steal. I believe Andrew Z. I also know that employe theft is also compounded by the prosecutorial system. You have to present an airtight slam dunk. Otherwise forget it. Even if it is an airtight slam dunk, if the prosecutor can't get his head around the accounting issues you still might not get a case filed.

I also know that you just don't set up a food establishment on the fly. As its already been pointed out, the Health Department just does not work that fast - ever.

I read somewhere that only 5-10 percent of people are hardcore crooks, while only 5-10 percent of people are entirely honest and would never steal under any circumstances. Most of the rest of the world is situationally honest, and a business owner needs to establish systems that keep situationally honest people on the right side of the law. If I ran a business and told the employees to just throw money in a cigar box, and I never established inventory and accounting procedures to protect my business, I suspect I would wind up with about 10 percent of the actual daily receipts on any given day.

However, by using computers, cash registers, regular inventory, cash reconciliation, inventory reconciliation, and other check/balance systems, an owner can keep most employees in line. A wise man once summed it up for me: "What gets measured gets treasured." If employees know you regularly audit the business and watch closely the cash and inventory, they will be much less likely to succumb to temptation. Conversely, if they know that no one is watching and that there is a lack of accounting oversight, all hell breaks loose very quickly.

Personally I always try to do the right thing, but if I was driving down the road and saw a bag full of money fall off of a Brink's truck, I would struggle with the decision about what to do. I would like to stand here and tell everyone that I would unequivocally march right to the police station and turn in the bag of loot, but I know that I would be sorely tempted to grab the cash. Yet I would never dream of pointing a gun at another human being and demanding a wallet or a purse, nor would I stick my hand in the poor box and take money donated to help the needy. I consider myself to be very close to the truly honest end of the spectrum, but I recognize that there are certain situations that could conceivably arise in which my efforts to be honest would be tested.

And let's face facts: each of us (excepting any saints or sociopaths reading this post) has made mistakes that we regret. While I am not dragging out my closeted skeletons here, I have made decisions in my life that can only be called "dishonest." I learned that I despised myself when I acted in a selfish manner, and I learned that life is much better when I: a) always tell the truth; and b) always consider how my actions affect other people. When I reflect upon my own failings in matters related to honesty, I inevitably consider how to make amends for those who have been somehow harmed by my dishonesty.

Yet even though I generally consider myself an honest person, I know that I am only one unexpected situation removed from being tempted to act dishonestly, and even though I could claim to be 99.9 percent honest, I recognize based on my own isolated moments of weakness that I am fully capable of justifying dishonest behavior in the future.

So for me and the 80-90 percent of human beings who are capable of dishonesty, business owners like Andrew Z. have to assume that at any given moment any number of employees are scheming to get a piece of his pie. In fact, one could argue that strict money and inventory controls not only act as a deterrent to theft, but that they are subconsciously appreciated by folks who might otherwise be tempted to commit dishonest acts.

Holland,

I know for a fact that I would never steal anything that does not belong to me. I've been a employee many times, and I also own a couple businesses now. It's not the way I was raised and now I know how hard it is to keep and make money.

lfrost2125:

How about a Brink's bag? Or better yet, what would you do if you found $20 on the street?

What would you do if the government paid you $50 more on your income tax refund than you were supposed to receive?

Just curious; not looking to poke holes in your self-assessment of your honesty.

Mike,

I've found money on the street many times. I always ask people around me and if it isn't anyone's I take it into the closest store. The people always look at me like I have a third head and are usually surprised. I usually here the "wow, I'm surprised you did that since some people would just keep it".

Once I found a wallet full of credit cards and 300 bucks. Through a little investigative work from the info on the man's ID I called him, and he came and retrieved his wallet and gave me 50 bucks for calling him. I was not even expecting a reward, I did it just to be a kind person.

Am I perfect?? Not even close. I have other flaws just like everyone else but I do not believe in taking or keeping anything that isn't mine.

Gotcha. For me I wouldn't even consider keeping money that I could directly connect to a living human being, but I would struggle with finding stray currency on the ground.

Oh don't get me wrong I've had second thoughts about stray money but my guilt about not doing the right thing gets the better of me.

The interesting thing about all of this and I don't think anyone has mentioned it is the short amount of time that it took to open multiple locations. The location in Perrysburg had not even been open a year before AZ opened the "xpress" location in downtown...which is probably the most difficult place to open a restaurant business in Toledo...then he attempts to open a business in Defiance followed by the salon business all of which are closed except for the salon.

Bad bad bad decisions...anyone that has a clue knows it takes a long time (2yrs on average) for and established business franchises (ie Little Caesars, Subway etc...) let alone an independent untested "Pizza" place that is hinging it's success on the name Andrew Z.

I can't say I really feel bad about the situation for him. He made terrible decisions and the biggest of them all was to open multiple locations when the original was not even a year into the market. The location downtown was open only 6 months...if even that. I work downtown and I believe it was only a month before I saw the writing on the wall. This location was originally open for breakfast...well that lasted about a month. Then they started opening just for lunch...no way you can survive running a business like that.

I credit AZ for his dream but seriously...didn't even look at the success vs. failure of restaurants? Then, the fact that he has the radio show means he can only put so much time into the restaurant business...he failed the minute he thought of opening multiple locations. Anyone that has worked in the hospitality industry knows that in order to be successful you need to live breath and be your business. Part time ownership of a restaurant is a recipe for failure.

Lastly...as far as money being stolen at the Pburg location and this affecting his ability to pay the landlord is crap. At the end of the day, it's not the landlord's fault AZ was robbed. I hate when people jump on the Owner or landlord because he or she did what they had to do to protect themselves from losing revenue. I think old saying of "don't take it personal...it's just business" applies here. Why should the Owner take it on the chin just because someone was robbed...and much to this Owners credit, they worked with AZ...once AZ did not hold up his end of the deal they locked him out...and rightfully so.

So good luck Mr.Z but for your sake and those that work for you, please put more thought into how to "effectively" run a business before you go any further.