by John LaFollette
‘Ville Voice Eats Correspondent
Does the “small” in “small business loan” refer to the size of the business, the size of the loan, or does it really mean nothing at all?
This question has to be raised in the case of a Metropolitan Business Development Corp. (METCO) small business loan, announced on Friday, that will allow a Louisville-based Qdoba franchisee to open a new store at 4th and Jefferson.
The $50,000 forgiveable retail loan was awarded to ZT of Louisville and will pay for plumbing and hood vents in the Marion E. Taylor Building. METCO says the loan is designed to encourage businesses to locate in areas that “lack a strong retail presence.” The new Qdoba in the Taylor Building will be located a block from 4th Street Live, perhaps the strongest (and best financed) retail presence in Louisville.
When commenting on the loan, Mayor/Lt. Gov. Candidate Jerry Abramson apparently quoted from the METCO website, saying, “Small businesses are the backbone of our city economy.”
But how small is small? If you don’t know, ZT of Louisville is a partnership between two Louisville restaurateurs and businessmen, Michael Grisanti and Don Doyle. Grisanti was an early investor in, and eventual director of, the company that became Qdoba. Doyle is a former president of KFC. Their company, as the region’s dominant Qdoba franchisee, has developed every Qdoba location in Louisville, Lexington, Nashville, and Birmingham.
At what point does a franchisee that is wildly successful—and a trip by the Bardstown Road Qdoba on any Friday or Saturday night, or the Breckinridge Lane Qdoba around lunchtime, will make it pretty clear that the local locations are that—cease to be categorized as a small business? Does a company whose annual revenues are estimated at $8.5 million need 50 grand to build a venting hood? Would that sum make a difference to any other local entrepreneurs in any other areas?
The corporate-fixture-to-franchise-magnate racket is one that is time-tested, well-known, and totally honorable. Qdoba may have the best burritos in town. But is it in the interest of Possibility City’s weakest economic sectors to help an established franchisee open a new restaurant next door to Louisville’s hottest of hot spots?
John LaFollette is a Louisville-based writer.
1 response so far ↓
1 Steve Bittenbender // Jul 29, 2009 at 10:07 am
I don’t know the standards the city has set for small businesses. I know, though, in dealing with the federal government, a company (depending on the industry) that earns up to $25 million or has up to 1,000 employees may meet the fed’s definition for a small business.
And, what’s the point in detailing the background of the franchisee’s owners? Do you believe that successful people should not be given incentives to expand their business? If that’s the case, then do you want the city to invest in riskier ventures that may or may not bring a return on the city’s investment?
The city should get its investment back and then some through the taxes generated by sales and employment created by the new restaurant — which should generate plenty of interest since it is indeed next to the city’s “hottest of hot spots.”
It’s a smart investment by the city. I just hope the city will be there to invest in Qdoba (and other viable prospects) when/if they want to expand in SW Louisville. Just like the daycare owner who got $63,000 this month.
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