I’ve done research on this and most companies say that they lost a lot of money with Groupon. Check out this article: http://www.retaildoc.com/blog/groupon-worst-marketing-business/
I did it, but I’m not a studio owner. I worked with Groupon to offer a deal for my workout DVDs as a bundle set for a bargain price. I slashed retail price by 50%, then of the price that the deal was advertised for, Groupon kept 50%, and I received 50%. However, as far as claiming sales tax goes, you have to claim sales tax on the dollar amount that the end purchaser paid, not the dollar amount that you received. (The sales tax burden falls on the vendor, not Groupon).
I had a wonderful experience working with Groupon. They were very well organized, had a fantastic webinar, and had a terrific sales associate that held my hand and answered all of my questions along the way.
If you go forward with offering a Groupon deal at your pilates studio, just be sure that you look at it as what it is: a marketing tactic. Don’t expect to make money off of this, but instead weigh this option as opposed to other means of marketing. I had done newspaper advertising in the past that proved to be very expensive with very little return on investment. With Groupon, yes, I cut my price significantly, then took a significant cut out of the revenue, but I was able to reach a very large market and receive some returning customers, Facebook and Twitter followers, and (quite frankly) some fans that will follow me to the ends of the earth!
Groupon has an extensive pipeline, so not every business that wants to be featured for a daily deal will be featured. If you ask me, they are a great company to do business with. It was an honor and a privilege to be featured as a Groupon deal in some areas (and side deal in others), and I would highly recommend working with them as a means to market your business.
I have had a really difficult time having any of them actually USE me or my classes on their sites: they have me sign the contract, establish parameters where they take 50-70% of the “deal” (I get less than $10 for a $175 class offering) and then they don’t ever even list the class at Groupon or one of the several deal sites.
It’s incredibly frustrating and I don’t plan on repeating my experiences.
Also be aware, Living Social has told me that they aren’t having as much success with fitness offerings so they are taking a bigger chunk (I think more than 60%) “to make it profitable”… for them! They also wouldn’t list the class for more than $30 ($145 discount), then they take 60% so I would offer a month of daily classes and receive $12. There are a ton of classes in the area so I would not expect repeat customers, regardless of the quality of my class.
As you can tell I’m fairly bitter about my experiences. If I sign a contract I don’t like being stuck in the trash for months and months! Good luck with your venture!!