SEC: Hey Restaurants, Don’t Call Your Customers ‘Guests’

by Christopher Freeburn | September 24, 2013 11:37 am

SEC: Hey Restaurants, Don’t Call Your Customers ‘Guests’

SECseal 300x300 SEC: Hey Restaurants, Don't Call Your Customers 'Guests'[1]Earlier this year, the U.S. Securities and Exchange Commission (SEC) took a stand … on language[2].

When Noodles & Company (NDLS[3]) filed to launch an initial public offering, the regulator objected to the restaurant operator’s use of the word “guests” to describe its customers. The restaurant chain responded to the SEC’s request by pointing out that a leading dictionary defines a “guest” as someone who pays for services at a hotel or restaurant, among other definitions, Restaurant Finance Monitor notes.

But the SEC did not back down. In May, it sent Noodles a letter, noting that “the term ‘guest’ does not appear to clearly represent the reality of the business transaction” between a restaurant and its customers. The regulator insisted that the word should be changed.

Faced with SEC intransigence, Noodles removed the word guest from its filings.

While the SEC may not like the use of the word guest in reference to customers, a number of restaurant operators have routinely used the work in past SEC filings, including Bravo Rio Group (BBRG[4]), Kona Grill (KONA[5]) and Ignite Restaurant Group (IRG[6]).

Endnotes:
  1. [Image]: http://investorplace.com/wp-content/uploads/2013/01/SECseal.jpg
  2. on language: http://www.restfinance.com/Restaurant-Finance-Across-America/September-2013/SEC-Doesnt-Like-Noodles-Guests/#.UkFvAe-l5b8.twitter
  3. NDLS: http://studio-5.financialcontent.com/investplace/quote?Symbol=NDLS
  4. BBRG: http://studio-5.financialcontent.com/investplace/quote?Symbol=BBRG
  5. KONA: http://studio-5.financialcontent.com/investplace/quote?Symbol=KONA
  6. IRG: http://studio-5.financialcontent.com/investplace/quote?Symbol=IRG

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