Photos and reporting by Stacie Joy
Last Thursday, Annie Grossman had no choice but to shutter School for the Dogs, the business she started in her East Village living room in 2011, with little to no warning to her longtime patrons and staff.
She said a potential sale to another local pet services operation fell through at the last minute, leaving her and the business in financial ruin.
As she wrote in an Instagram post, "The reality is that there is the business owner you want to be, and then the business owner you sometimes end up having to be."
How did a beloved local business run by a lauded female entrepreneur reach this point?
I talked with Grossman over the past few days, and she discussed what led up to the painful decision.
She launched the dog-walking and training service from her living room on Third Avenue and immediately faced adversity when her home was destroyed in a fire.
After a successful fundraiser, Grossman opened a shop at 155 E. Second St., just east of Avenue A. As her business flourished, she moved to a larger space at 92 E. Seventh St. near First Avenue in 2018. This space was double the size of the Second Street studio and included a yard, room for merchandise and a consultation room.
While the relocation increased her rent from $4,000 a month to $11,000, business was going well, and School for Dogs could handle the boost in rent and expenses.
"Even with the onset of COVID, we still did well," she said. "We were doing important work for people and dogs, helping people get excited about dog training and helping people and dogs to learn together. It was a labor of love."
There was "not a ton of margin, but [we were] still making it," Grossman said.
However, by 2022, the thin margins became problematic with unexpected expenses.
"You can only lose so much money. I took out loans, used my credit cards, and had decent advisers," Grossman said. "Then the A/C blew, and it was $12,000 to replace both the units in the space, and I had no more cushion."
Other expenses piled up, such as $20,000 in roof repairs that the landlord had her responsible for and money she didn't have.
Now carrying debt, Grossman discussed the situation with a fellow business owner in the pet services community. Grossman said the woman would take on most of the debt and negotiate the lease.
They agreed on a Nov. 30 closing date and that the new owner would still honor the previously purchased group classes, packages, and bookings.
According to Grossman, the potential new owner never showed up at the attorney meetings and ghosted her before she finally received a "typo-riddled email" that said, "In essence, we're no longer interested in the opportunity."
Grossman had no other backup plan. "I feel like I've been had; I feel like I've been left at the altar."
Problems online
Grossman was also battling on a second front. Her online business was sued for not conforming to ADA standards.
She said she was the victim of an "ADA shakedown" via a frivolous lawsuit that she needed to heed.
"Because this was pending litigation involved in the online shop," she could pay them to settle or shut down the site. She chose the latter and announced just before Christmas that the online store was closing to focus on School for the Dog's core business and "consolidate to create a tighter ship for the new owner."
By Jan. 2, without the new ownership in place, the Seventh Street storefront was dark as well.
In conversations over the weekend, Grossman said she has no assets and is completely out of money. She paid her staff through the current pay period but had nothing for severance.
She said she feels awful about the abrupt closure and how it affected her employees, trainers, and customers.
Grossman said she would love to have someone take over the business and is "completely open to any situation" that involves keeping School for the Dogs going.
"Start out doing something you love, end up doing something that doesn't speak to the skills that brought you there," she said.
Below is the Instagram message about the closure from Sunday...
24 comments:
NYC is hard and cruel. Small business can be crushed by anything.
I met Annie once and she was very sweet. I feel awful for you about this. Years of hard work upended. Maybe you can find another financial partner.
It's an unfortunate series of events. Hard working small businesses get screwed by shady lawyers and insanely ridiculous government regulations. Then again, we have those business people who screw their workers, screw the community, disregard all laws and manipulate the government.
We reward them by electing them president....twice!
Great article on the corrupt law firms suing small businesses for ADA website violations: https://www.wsj.com/business/entrepreneurship/small-business-web-accessibility-lawsuits-c910f6fb
Complete racket that really needs to be addressed by legislation
Forgive the confusion, but in what ways does an online store have to be ADA compliant? I don’t understand how a person or business in this case can be sued over that.
Terrible news
"An online business can be sued for ADA compliance because the Americans with Disabilities Act (ADA) mandates that all businesses, including online platforms, must provide equal access to individuals with disabilities, meaning their websites need to be accessible to users with assistive technologies, and if they are not, individuals can file lawsuits against the business for discrimination based on disability."
This is horrible. SFTD was a welcoming place with a wide range of offerings that was very kind to my little guy. I started worrying about them when they changed business models in the last year or so, but I was hoping that I was wrong.
Very sad to hear. I wish her the best of luck 🤞
THATS CRAZY
11,000/mo for a space like that…real estate are crushing our local small businesses.
Seems like a Karen found an opportunity for a cash grab and took it. People are disgusting.
I feel for every small business in NYC, seems near impossible to thrive in this city.
This is a very sad story. The best to everyone affected.
Another tragic hit for the East Village.
Very sad story why would she be responsible to pay $20,000 for a roof repair when she does not own the property and only rents it? That should be the property owner's responsibility and not hers.
So sorry to hear this. The ADA thing is disgusting. This was a good place and MS. Grossman is a very good person who gave our community an important service.
The ADA is used by incredibly predatory lawfirms who abuse the hell out of it. Any business is potentially under threat of these mafia like tactics. There's no grandfather provision and there's some nebulous talk about making accommodations within reason in relation to the business size... but no strict definition of this. As most businesses don't have lawyers on retainer, the costs of fighting these suits is huge. Any business in the east or west village (for example) is almost guaranteed to be out of compliance - and even if you rented the space and are not the landlord, it's on the *business* to put in ramps, widen hallways, etc. Famously nyc doesn't have much space at all. It is like a sword of Damocles hovering over every small business who do their best to accommodate the ADA. The issue is, if you fight and lose you have to pay for the costs of both sets of lawyers - the reverse is not true. I know some firms who are pretty much ambulance chasers and find someone and use them to sue 3 or 4 businesses on a block.. then move over and sue the next block.
The fact that this can be done for websites as well just makes it so much easier to prey on single proprietorships.
No one is arguing against equal access for the disabled, but the ADA has been perverted by bad actors and it should be shouted about from the rooftops.
I heard about another small business in the East Village where these "ADA lawyers" threatened a lawsuit or a $20K cash settlement to go away, even though no actual customers, including those in wheelchairs, had complained
I wouldn't rush to blame the ADA. All you can get is injunctive relief and lawyers' fees, and that only if the situation isn't remediated. The real problem appears to be that she didn't have enough margin to build a reserve fund for capital costs. I know that landlords sometimes put building maintenance costs on commercial lessors, but why she was responsible for the roof when SFTD was (AFAIK) only the first floor/backyard/basement is beyond me.
It's heartbreaking.
I'm thinking the ground floor of the building has a rear extension and the lease stated that it was her responsibility to maintain the roof
I feel bad for the people who bought training packages, dog walking credits, and/or yearly memberships.
This didn't only happen because the ADA thing for sure - I have no idea why the School for Dogs was being asked to pay for roof repairs, that's crazy... but lawyers fees and settlements (and whatever renovation costs come up) can easily reach hundreds of thousands of dollars - and it can take a few years to get it settled (all the while, costs add up). That's why these bad actor law firms will take a "settlement" before it even reaches a judge (a judge sees this case very late in the process) of something like $10-50k, depending on how much they think the business is able to pay.
It's really a serious issue in the city. It's a slow but major pressure on businesses. I don't know about you, but I want more small businesses ... and this is something that needs to be dealt with.
So she had to pay for a roof and AC repair for which she will never benefit? How is that fair?
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