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4 Lessons From the Nightmarish Amy's Baking Company

4 Lessons From the Nightmarish Amy's Baking Company
Image credit: Facebook.com

Social media is all abuzz over Fox's Kitchen Nightmares' season finale featuring Amy’s Baking Company. The episode marks the first time a restaurant has proven too much for the legendary hot-tempered chef Gordon Ramsay.

Owned by Amy and Sam Bouzaglo, the Scottsdale, Ariz. bakery is a monument to bad business practices. Everything from pocketing server tips to an owner swearing at customers was depicted on this train wreck of an episode. The owners received so much backlash on sites like Reddit and Yelp, they retaliated with not-so-nice comments (almost all are deleted).

If you don't want your business to turn out anything like Amy's Baking Company, here are four lessons young entrepreneurs can learn from this small-business nightmare:

1. Be honest.
The facadé of Amy's Baking Company is actually one of the most interesting aspects of the restaurant. From the outside looking in, the business looks like an upscale delicatessen appropriate for the well-to-do citizens of Scottsdale. As Ramsay and his audience learn the truth behind the restaurant, the cracks begin to grow larger. For instance, Sam claims all of the food the restaurant serves is cooked from scratch. When Ramsay finally sits down for a meal, it’s revealed the expensive menu is actually a mash-up of store-bought food. Once exposed to millions of people, the backlash from Yelp reviewers erupted.

Lesson learned: Be upfront about your offerings. The last thing you want to do is lose the trust of your customers, because when it's gone, it is extremely difficult to recover.

Related: Branding Lessons From the Oscars

2. Criticism is good.
Amy's Baking Company won notoriety when Amy flipped out at a negative Yelp review. The complaints included a $3 charge for extra bread, paying $14 for a reheated pizza and the food received was actually sent back by another table. All of the issues were fixable, and the reviewer presented them with the voice of an unsatisfied customer not a vindictive hater.

Instead of addressing the issues in a professional manner, Amy decided to respond to his review with a full-page rant. Among other things, she criticized the customer for being alone on a Saturday night. She also stated that he was a moron and had an untrained palette.

Don't do this. Remember your customers are the ones paying the bills. Treat them with respect, and when you're wrong, correct the situation.

3. Communication is key.
Much of the problems on the show result from a lack of communication. Sam doesn't explain any customer complaints to Amy, instead telling her everyone raves about her food. For her part, Amy spends most of the time in the kitchen with little direct contact with customers. Sam's passive aggressive nature, along with Amy's refusal to talk to anyone prevents the pair from correcting problems or resolving customer issues.

When running a startup, the more communication the better. It is key to listen to employees, customers, vendors and colleagues, as it will help you address concerns quickly and ensures everyone is on the same page.

Related: 5 Ways to Keep Your Ego in Check as a Young Entrepreneur

4. Treat your employees with respect.
Reality TV is edited for drama. It’s rare when the subject of a show called Kitchen Nightmares becomes truly unredeemable. The Bouzaglo's managed to set a new low. The moment came when it was revealed that Sam pays employees hourly, keeping their tips for himself. At that moment, their sob story about being a struggling business got ripped to shreds.

Remember, happy employees, make for happy customers.

If you want to watch the full episode, head over to the Fox website.

How do you handle heated situations at your startup? Let us know in the comments below.

The author is an Entrepreneur contributor. The opinions expressed are those of the writer.

Adam Toren is a serial entrepreneur, mentor, investor and co-founder of YoungEntrepreneur.com. He is co-author, with his brother Matthew, of Kidpreneurs and Small Business, BIG Vision: Lessons on How to Dominate Your Market from Self-Made Entrepreneurs Who Did it Right (Wiley). He's based in Phoenix, Ariz.
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