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Noodles & Co’s successful IPO provided a delicious example of how stupid our government is. WSJ’s Money Beat has the story.
The Securities & Exchange Commission has a warning for the restaurant IPO craze: Don’t call your patrons “guests.”
The euphemism, common in the food-service industry, caught the attention of the regulators in the IPO filings of Noodles Inc., according to correspondence released Monday.
“Please refrain from referring to your customers as ‘guests,’” the SEC wrote in a letter dated in April. “We note that ‘customers’ denotes persons who pay for goods or services.”
Noodle’s granted the SEC several language changes but attempted to push back on a complaint about guests. Noodle’s lawyers at Gibson Dunn & Crutcher LLP on May 10 said it would add a note to the filing that defined its customers as guests, but would continue using the term.
“The Company notes that Merriam-Webster’s Dictionary defines ‘guest’ as ‘a person who pays for the services of an establishment (as a hotel or restaurant)’. This characterization is consistent with a number of companies in the restaurant and hospitality industries, and the Company believes it is consistent with the evolving use of the term ‘guest’ in public filings and in common usage in recent years. … Accordingly, the Company respectfully submits that it does not believe its use of the term ‘guests’ creates confusion with potential investors regarding whether or not these individuals pay for their good or services and has also provided a definitional term to further clarify the usage.”
But the SEC literally doesn’t care about Merriam-Webster’s Dictionary. It continued to demand a change two weeks later. …
A WaPo story on the growth of a DC area business shows how to succeed in business by really trying.
… The Bethesda native, the youngest of five children of a tax lawyer, has been scrapping since his student days at WashingtonCollege in Chestertown, Md., in the late 1980s. The summer before his senior year, an elderly woman who lived across the street from his family asked Alexander to take her and her mixed terrier to the veterinarian.
“I said sure,” he recalled. “I started driving errands for her in my parents’ Oldsmobile station wagon.”
Word spread, and he used the new Saab his parents gave him for graduation to expand the errands business. He shopped at grocery stores. He ran people to the doctor. He drove their cars to emissions tests. He charged $15 an hour and worked seven days a week. He even drove a kid to and from private school. He drew the line when a man asked Alexander to represent him in court for a speeding ticket.
After a couple of years, he had an epiphany.
An executive at Studley, the real estate management firm, asked Alexander to drive him to Union Station. Then the executive kept calling for rides and errands. Alexander realized that the businessman, who was expensing many of the charges, was a better client than the everyday customers who were paying out of their pocket.
“I saw very, very quickly that the corporate market is where the dollars are,” he said.
He expanded. He bought a 1985 Chrysler limousine for less than $5,000. He ran an advertisement for chauffeur services in The Post. People began calling. Living at home with his parents, he saved like mad and used the profits to buy more vehicles.
His next big break came when he put on a suit, drove to the new Marriott near Montgomery Mall and secured a lucrative account for the hotel’s business travel to and from the airports. …
Government does not only interfere in the markets. It also interferes in our lives. Also with disastrous results. Remember Reynolds’ Law? It was named after Glenn Reynolds of Instapundit who said; “The government decides to try to increase the middle class by subsidizing things that middle class people have: If middle-class people go to college and own homes, then surely if more people go to college and own homes, we’ll have more middle-class people. But homeownership and college aren’t causes of middle-class status, they’re markers for possessing the kinds of traits — self-discipline, the ability to defer gratification, etc. — that let you enter, and stay, in the middle class. Subsidizing the markers doesn’t produce the traits; if anything, it undermines them.” The LA Times has a story on college grads working at jobs that heretofore did not require any college.
… A college degree once all but guaranteed a well-paying job and higher earnings than high school graduates. But fewer of these good jobs are now available because of both long-term economic changes and the lingering effects of the Great Recession.
People such as Flagherty with college and advanced degrees are working jobs that don’t require them, whether by choice or necessity. That in turn pushes people without college degrees out of those jobs.
In 1970, only 2% of firefighters had college degrees; now 18% do, according to Richard Vedder, an economist at Ohio University. Fewer than 1% of taxi drivers had a college degree in 1970; now 15% do. About 25% of retail sales clerks have college degrees, Vedder said.
“The main reason is a pretty simple one,” he said. “The number of college graduates has grown vastly faster than the number of jobs that require high-level education skills.”
In the 1980s and 1990s, the demand for college graduates started booming, especially in the lead-up to the tech boom, said Paul Beaudry, an economist at the University of British Columbia who has studied this trend. Wages grew and a college education paid off.
But when the tech bubble burst, the economy was left with an oversupply of college graduates. Some went into industries related to housing or finance, and then the recession wiped out those jobs. No industry has emerged to employ all the people who got college degrees in that time, he said.
As more college graduates have flooded the market, employers are able to offer lower wages. The earnings of college grads have fallen about 13% in the last decade, according to DrexelUniversity economist Paul Harrington. …
Andrew Malcolm with late night humor.
Conan: Russia’s President Vladimir Putin says he may seek a fourth term, adding, “But that’s up to the people to decide.” Then, he laughed for 10 minutes.
Leno: Obama is now getting a lot of criticism from his own party. It’s gotten so bad that Jimmy Carter has started comparing Obama to Jimmy Carter.
Leno: Critics says ObamaCare will require doctors to ask you about your sex life. That’s outrageous! Your sex life is between you and the NSA.