Originally Posted by gardener
I think iDine advances the restaurant, say, $10 grand. Then they have to provide $20 grand in dining credits when the customers dine(us).
If they do $20K of iDine biz in 6 months, it would be 200% annual interest, roughly speaking. Two years, 50% APR. One of the reasons a restaurant is not listed in every program imho, to adjust the recovery rate.
I'm not clear how that is a 200% annual interest rate over six months. The cost to the restaurant for the $20K of dining credits can't be $20K -- otherwise the restaurant will never make money, even on non-iDine dines.
I'm not sure what restaurants customarily do for markup. If the cost for $20K of dining credits is much closer to $10K, then the effectual interest rate would be significantly less than 200%. Alternatively, perhaps this can be viewed as iDine paying in advance in exchange for discounted meals.