There are quite a few reviews on Yelp that indicate they had real problems with service, food quality, menu selection, and price. Their menu basically consists of expensive vegan hot-dogs and fairly generic sandwiches, which is a tough sell in Chicago when you have some very good food around for very cheap. It also seems like the owner is now backing away from any claims that it was Groupon which actually did him in.
If I had to speculate, it seems like the restaurant was likely faltering already, and the owner tried to attract new customers with some Groupon deals. It didn't end up generating the kind of revenue he had hoped, it didn't result in new returning customers, and the restaurant closed down. I think if you have a restaurant that is really great and you want to the word out, Groupon can be a real driving force in getting people in the door. However, if you cannot guarantee the kind of experience that is going to make them come back, and/or you are already walking a tight line financially, it might not be a good idea at all.
If I had to speculate, it seems like the restaurant was likely faltering already, and the owner tried to attract new customers with some Groupon deals. It didn't end up generating the kind of revenue he had hoped, it didn't result in new returning customers, and the restaurant closed down. I think if you have a restaurant that is really great and you want to the word out, Groupon can be a real driving force in getting people in the door. However, if you cannot guarantee the kind of experience that is going to make them come back, and/or you are already walking a tight line financially, it might not be a good idea at all.