View Full Version : Why are most strip clubs owned by men???
jack0177057
12-19-2013, 10:50 AM
Back to the gender question in a round-about way. If the strip club business model now has comparatively poor profit margin, why would somebody choose to invest in a strip club ? Male strip club investors might have a non-financial reason for doing so that female strip club investors would not !!!
Melonie makes excellent points and I think this quote hits the nail on the head. It is stupid to own a stripclub, unless you are mega-wealthy and can afford to have a top-notch lawyer on your staff, buy off your local and state politicians, buy off your local police department and judges, etc. One lawsuit to protect your First Amendment freedoms (nude dancing is an artistic expression) from civil nuisance complaints or from new city ordinances designed to shut you down can easily cost you more than $150,000.
Would I buy a small club given the chance? Sure, but that's because I am a stupid guy that loves dancers and would do anything to be surrounded by them. No person, thinking straight, and with even an ounce of business sense, would want to invest in an independent ("mom and pop" as opposed to large corporate chain) strip club. Apart from all the risks of any small business and all the added risks of owning a bar (dram shop laws), you have constant harassment by the police department and by the family-values-activists, not to mention the social stigma of owning a strip club. (And not to mention other issues that may arise for a woman, like your husband generously volunteering to interview all the new dancers and being a little too friendly with them.)
You can lose your ENTIRE investment if your local ordinances change unexpectedly. Your city or town can suddenly impose a six-foot-buffer zone, and you will watch all your customers (and your dancers) leave your club to go to the club just down the road, outside the city/town limits, where lap dances are still legal. Or, a new town/city ordinance can impose a "sin tax" on your establishment and you cannot compete with the prices of that other club just down the road outside the town/city.
You can lose your ENTIRE investment if your club is forced to shut down because of acts of "prostitution" (which can be defined in many ways - like certain types of nude touching) or a single tragic event. Near where I live (an affluent suburb of Houston) we had only one club, but it was an amazing club in a mansion-like building. It was huge, very upscale and classy, and very clean. Although the girls gave very erotic lap dances, there were no happy-ending extras offered as far as I know and I am not aware on any allegations of prostitution in that club. It even had another venue connected to it, which was an upscale bar where cool bands performed for a general audience. The club was forced to shut down after only one tragic event. An underage dancer had consumed some alcoholic beverages, got in a her car drunk and killed herself.
Djoser
12-19-2013, 11:51 AM
How long ago did that happen Jack?
Interesting quotation, too--funny I just started a thread about Oscar Wilde in the Lounge, & am about to start reading Portrait of Dorian Grey
Getting back to the topic and your post, if you have an 'in' of some kind with local government, legal or otherwise, it goes a long way towards ensuring profit.
My last club has made a shitload of money for its owner in the last 6 years. not everyone is losing their ass.
Also agreed with Melonie that the guys often have different motivation.
Melonie
12-19-2013, 12:06 PM
Also agreed with Melonie that the guys often have different motivation.
There you go !!! Some guys are willing to put up, and risk losing, hundreds of thousands of dollars worth of investment in exchange for the opportunity to receive 'up close and personal' attention from an ever-changing lineup of different dancers ! And, increasingly, some number of dancers will always be willing to provide that 'up close and personal' attention in exchange for preferential treatment, 'gifts', opportunity to access 'high roller' customers etc.
Jhh80
12-19-2013, 12:24 PM
There is one theme that you will see over the next 10 years:
The death of the small independently owned club.
As as various forms of gov't move to enforce taxation rules (read w-2 employment) upon clubs, smaller independents will suddenly find themselves with a large back payroll tax hit on their books, combine this with and additional employment rules and increasing costs to manage paperwork. Thus,, over time the independent clubs will slowly be bought out by the larger corporate chains or go out of business due to other competitive factors (or due to other legal reasons)
On the whole, this is likely a good thing, as with fewer and more legitimate competitors dancers will be able to benefit from medical care, retirement savings (401k), unemployment income and more importantly feel safer and more comfortable knowing that employees and managers at a large company have to play by the book, or they can very easily run into class action or sexual harassment lawsuit issues.
Also, this likely means that talented and bright dancers will have opportunities for career advancement within this corporate framework as they transition from dancing (house mom, managers and higher) .
This is not to say there will not be independent exceptions, but broadly speaking, only large companies have the resources to manage these hurdles going forward. As mentioned above, it only takes a few bad apples for a club to lose it's license, and very few places are approving new applications for an industry that is already saturated in most areas (particularly with the internet making escorting far easier and more "cost effective" for the type of customers looking for that entertainment).
The reality is, continued tough times ahead until the industry contracts sufficiently to allow for decent margins again and as owners adapt to the realities coming over the next 5 -10years.
By 2025 (feels weird writing that) approximately 75-85% of strip clubs (topless or nude) will be owned by reasonably large corporate chains (minimum of 5 locations).
Everybody just needs to to be ready and willing to adapt
Melonie
12-19-2013, 12:57 PM
^^^ I can't disagree with the basic premise you lay out. In point of fact, this is one of the reasons that I decided to retire from live dancing.
The unspoken underlying point, of course, is that the future trend is clearly showing that an ever growing percentage of club customer money will wind up being diverted toward taxes, unemployment and disability insurance premiums, mandated benefit costs, accounting services, legal services etc. - and away from clubowners' and dancers' pockets. Some of these new 'costs of doing business' can be mitigated via economy of scale i.e. paying one attorney and one accountant to handle five 'sister' clubs under common ownership as you point out. However, some cannot.
While it remains to be seen whether 'corporate' club chains will provide a positive career path for retiring dancers, it is fairly certain that 'corporate' club chains will provide a negative career experience for existing dancers. I for one do not want to be reduced to an 'interchangeable and disposable' labor unit !!! I for two do not want to see my self-generated 'sales revenues' being split 50-50% with the club, nor my self-generated 'tip revenues' shared with other dancers. I for three do not want to see my schedule 'cast in stone' re shifts to be worked, or limited to 28 hours max per week.
Djoser
12-19-2013, 01:08 PM
Oh man I hope you are wrong. I can't stand the big corporate clubs. Though Rick's I have heard is good to work for.
All three clubs here are owned by guys who are pretty secure financially, who can probably beat the storm over employee status. But I fear the smaller clubs in most cities could indeed be in trouble if the wave of lawsuits continues. Those idiots are killing the business, and the lawyers are the only ones who will benefit.
Jhh80
12-19-2013, 01:58 PM
In the So Cal area, one well known (& competitor) corporate chain to the place I work at already has female house moms, club managers, corporate manager and I heard recently even a DJ sprinkled throughout their organization. If anything, this is a proactive and smart move...think of the optics, harder to call a company or business sexist (even in this industry) when there is evidence of career advancement and women working at all areas/levels of the company.
Melonie, what is the house split in your area? 40/60 and 35/65 is already becoming the norm at nude clubs here and yes, realistically it's going to go towards 50/50. Liquor clubs will always have a different payout structure because more of the revenue comes from drinks. At the end of the day, for owners (especially corporate owners) it's a business, not an independent who loves the job and dancers will have to adjust to the new economics too
Tips will legally always have to remain as tips, but dancers will likely have dance sales quotas, and shall have to comply with schedules, more rules and other traditional "job" constraints as this march continues. Performance reviews where sales numbers are discussed will be the future, realistically it should mean clubs end up with fewer "problem dancers" as they are able to fire and discipline dancers with fewer repercussions for cause.
Djoser, the fact is, your area sounds like a prime candidate for a corporate chain to make "an offer one of the guys can't refuse" because they will want a foothold in the market, and all of a sudden they can push the other guys out (tCorp can afford to undercut on pricing until the other owners are financially inclined to sell) as they can afford to take losses until they basically control the market as they have profitable clubs elsewhere.
You can see what Rick's has been doing in all their corporate presentations, it's just going to keep acceleratin faster and faster.
Djoser
12-19-2013, 02:03 PM
Very interesting to read Jhh80.
There is a LOT of money to be made down here, especially during Season. I know at least one substantial investor was looking to buy or start a club here but it didn't go through.
Melonie
12-19-2013, 02:53 PM
Melonie, what is the house split in your area? 40/60 and 35/65 is already becoming the norm at nude clubs here and yes, realistically it's going to go towards 50/50.
I've seen anything from 50/50 with zero other 'fees' to 100/0 but with $200+ per shift house fees attached ! Personally speaking I much prefer the latter, because 100% of $1000 minus $200 = 800 net, whereas 50% of $1000 = $500 net !!! But the latter can't really work for a 'corporate' club business model, and would be illegal for an 'employee dancer' business model.
Agreed that these 'employee dancer' lawsuits don't benefit either the clubowners or the dancers. But they DO benefit other parties besides the attorneys, namely the IRS and state tax agencies, the state disability and unemployment insurance funds, etc.
In regard to dancer stage tips, one of the first things that the IRS has attempted to put in place for tipped employees in 'cash' businesses is tip sharing. The typical execution is all tipped employees working a particular shift must turn the cash tip money over to the 'employer' at the end of the shift, with the 'employer's' payroll system then distributing that tip money in equal shares to all of those employees as part of the weekly paycheck ( fully reported, with appropriate taxes withheld ). The IRS does not want to see self-generated tip income reporting by the employees, and the 'employer' does not want to have to deal with the nightly demands of individual tip accounting for individual employees. And I for one don't want to see my $200 in stage tips averaged down to $75 in order to 'subsidize' paying the same $75 to other dancers who only generated $50 in stage tips on their own.
Jhh80
12-19-2013, 03:11 PM
I agree, tips should stay with the person who generated them. This isn't the USSR of America (yet)...door and floor guys split tips from dancers, because otherwise at the end of the night you get embarrassing arguments where guys would fight over carrying out bags/walkouts for the generous girls.... It's funny how quickly everybody can get back to a second grade mentality....
The stage fee model should result in better more motivated dancers, but to date is not holding up well in court legal arguments, and it appears it is a matter of time until there is enough case law which will force all clubs to move to w-2's (funny how all of a sudden there will be a lot more women who "waitressed" at SC's when that happens)
jack0177057
12-19-2013, 10:04 PM
How long ago did that happen Jack?
Back in 2009. I actually found a story about it in the internet and it is more complicated than what I thought, but the tragedy was the event that the authorities exploited to shut down the club.
This article on the closing of the club discusses many of the legal issues and problems that a club must deal with:
http://www.houstonpress.com/2009-10-01/news/club-dead/
My last club has made a shitload of money for its owner in the last 6 years. not everyone is losing their ass.
Sure it can be profitable, but the risks are too high. If you select a very liberal and tolerant community, you may have less risk of harassment and persecution, but there is always the RISK that someone will drink too much and get involved in a car crash, that your dancers will get charged with prostitution (and the owner may get charged with promoting prostitution), that local ordinances will "toughen up" on clubs, that the local DA will decide to embark on a moral crusade against clubs to improve his re-election chances, etc. I'm just saying that a prudent person who wants to open up a small business can find many other business opportunities with the same potential for profit and without all the associated risks.
Now here is a guy who seems to have it all figured out. He opened up a club in his own house and seems to have gotten his neighbors on board with it and maintain a friendly relationship with the local police.
http://www2.metrotimes.com/news/story.asp?id=14918
AmishGirl
12-26-2013, 05:42 PM
Now here is a guy who seems to have it all figured out. He opened up a club in his own house and seems to have gotten his neighbors on board with it and maintain a friendly relationship with the local police.
http://www2.metrotimes.com/news/story.asp?id=14918
Just when you think you've heard it all.....!
Melonie
12-27-2013, 04:42 PM
^^^ that's a pimping charge waiting to happen ... if he winds up on Republican mailing lists and at Republican fundraisers in Detroit LOL !!! Otherwise, crony corruption at it's best !!!