Mollie Buys a Brothel

This story doesn't fit very well in this category, but I don't know where else to put it. Suggestions are welcome.

*****

Contents

The Phone Call

The Meeting

The Visit

Dancing

The Negotiation

*****

The Phone Call

"Hello. This is Jim Grinsted, returning your call. I'm a business broker. That means I sell businesses on commission in the same way a real estate agent sells houses."

"Hi. Thank you. I'm Mollie Grossman. I called you-er, this is a bit embarrassing-because I heard you had a business for sale. I can't find it on your webpage, so maybe I'm mistaken. Is it true that you're trying to sell a brothel?"

Jim, nonplussed that a woman was asking, tried to hide his surprise. "Yeah. For obvious reasons we can't advertise it openly. It's in Povera. Have you ever been there?"

"I've hardly even heard of it, much less been there. Tell me more."

"Povera is a small, very poor country on the mainland. The coast is malarial, with no good harbors or beaches. Most of the people live on the inland plateau, where elevation makes the climate a bit more bearable. That's where the capital is-Putaville. Further up-country you have some hills. The business is located in Putaville."

"How do people there earn a living?"

"They barely do. There used to be mining up in the hills, but that's no longer profitable. In good weather the country grows it's own food-there are a lot of farms around Putaville. There's no tourism to speak of-nothing much to visit. Truthfully, the biggest industry is foreign aid. All the Western governments have planted the flag there-the USAID, the German DED, the Japanese, Scandinavians, Canadians, etc. And then the UN is there big time-UNDP, WHO, WFP-any acronym you can imagine. The government's relatively stable, so Putaville serves as a headquarters for a big part of the continent. You have a lot of expats living there."

"What language do they speak?"

"They have their own-I guess it's called Poveran-I'm not really sure. French is the language of government, but English is widely spoken."

"Cool. I speak both French and English. Can you tell me more about Putaville?"

"I've only been there once, so far. The city itself looks like it was built for a hundred thousand people-it's got a small, but pleasant city center. That's where all the expats hang out. Surprisingly, there are quite a few good restaurants. Once you get out of the city center it's all pretty desolate-miles and miles of shanty towns. Maybe two million people live there. For all that, the crime rate is relatively low-at least for a poor country.

"The airport is 15 miles from the city. There are direct flights from London and Paris. The connections are pretty good, but it's not cheap. Among other things you have to buy a visa when you enter the country-that'll set you back $90. A taxi into town will run you about $20."

"So what about the business?"

"It's located in a ten-storey building at the edge of downtown. They occupy the entire building. It used to be a hotel, but then they built the big, international chain hotel and this one couldn't make it anymore. So it became a brothel. I think it's unique in the world. Their mission is pretty simple-to attract high-class tourists with luxury, state-of-the-art facilities. Nobody has any other reason to visit Putaville, so this really is the biggest tourist attraction. They get some business from the expats as well.

"They charge $995 for 24 hours. That includes a luxury room, all your food and drink, and... I guess you'll have to pardon my French, and normally I wouldn't talk this way to a lady-but all-you-can-fuck as well. They have 20 rooms-suites, actually-so if they sell out at full price, they gross about $20,000 per day. Of course that doesn't always happen."

"Why'd they put it in such an out-of-the-way location?"

"Labor costs I presume. The dusky daughters of the poor all need to earn a living. There aren't too many good opportunities for them. The brothel pays a lot more than the $3 to $5 per day that an unskilled female can otherwise earn. Then the government is friendly, and the country doesn't attract too much attention from the bluenose activists."

"So do they actually make any money?"

"I can't go into details with you over the phone. But the short answer is yes. I think it is a profitable business, albeit a risky one."

"And the price?"

"They're asking $490,000."

"Does that include the building."

"No, definitely not. You do not want to own the building. Land title in countries like Povera is a murky business, and the last thing you want to do is invest in that. Some local citizen owns the building. The business does come with all the furnishings. Again, I can't go into details over the phone, but we can discuss that later if you're interested."

"Who owns the business now?"

"Again, I can't discuss that over the phone."

"So what's the next step, then?"

"To continue I need three things from you. First, I'll need a confidentiality agreement. I can e-mail you the form. Any information I give you about this business has to remain strictly confidential. In particular, the owners want to avoid any conversations with the media.

"Second, as said, the asking price is $490,000. I need evidence that you are a credible buyer. You need to show that you have access to enough money. That can be through bank statements, or through a line of credit, or perhaps by ownership of some liquid asset. I will need original documents or notarized copies.

"Finally, given the nature and location of this business, I need some reimbursement of business expenses in advance. Initially I need a deposit of $1000. This is non-refundable, but if you eventually purchase the property it will count toward the purchase price. If I need to accompany you to Povera, you will need to pay an additional $2000. The same rules apply-the amount is non-refundable, but counts toward the final purchase. Thus my services commit you to paying $1000 now, and probably $2000 later, for a total of $3000."

Mollie thought for a minute. "OK," she said slowly. "I am interested. Please send me the confidentiality agreement, and I'll work on the rest. I might still change my mind, but I'll probably oblige your request. What happens then?"

"Where do you live?" asked Jim.

"I'm in Toronto. I'm Canadian."

"That'll work. I'm based in Chicago. Once I have what I need from you I can fly up to Toronto for a day and bring all the business details with me. Then I can answer all of your questions. I'll leave the paperwork and accounts with you."

With that they exchanged contact information and bid each other well.

The Meeting

A month later, just after lunch on a Wednesday afternoon, Jim found himself in the lobby of a Toronto Airport hotel. He scanned the room for somebody who might be Mollie.

She spotted him first. "Are you Mr. Grinsted?"

"Yes. Call me Jim. I take it you're Mollie?" She was a short, plump woman, perhaps 50 years old, who looked very Jewish. She wore a lot of jewelry and makeup, none of which made her look younger. She shook his hand vigorously, with a big smile. Jim liked her right away. "I've reserved a conference room for us. But we can go get a cup of coffee first, if you'd like. Or actually, have you had lunch yet?"

"Coffee sounds good. Perhaps to go, so we can get started." There was a Starbucks in the lobby. Armed with refreshments they moved to the conference room, where Jim had already stashed several binders full of information.

"So do you want to start with the financials or with the business model?" Jim asked.

"Let's go with the business model. That's the most important."

"The owner is a Swiss national named Rémy Lagarde. The place is called the Hôtel Lagarde et Spa. He advertises it mostly in Europe, and it's become especially popular in France and Switzerland. Also in Quebec. That you speak French is an important advantage.

Mr. Lagarde visits the location once or twice a month. Customers pay in advance by credit card, so income is entirely under his control. There are no large financial transactions at the hotel. In that sense financial control is easy.

"He does have to pay local suppliers, especially for food and drink. Most are regular vendors who extend him short-term credit so he doesn't have to trust employees with large amounts of cash. Payments to these people are handled by a local bank, who Mr. Lagarde pays in dollars by wire transfer. He has separately hired a Poveran auditor to check on every transaction. His banker also handles the cash payroll to the employees. How much each employee is paid is completely computerized-there is little room for fraud. This is a high-tech company, as you'll see.

"For many smaller transactions he has no choice but to trust his general manager. That woman's name is Elizabeth, and she's worked for him for ten years. She is kept to strict account, at least down to the dollar. The auditor checks up on her daily, and the owner goes over the books in detail with every visit. If there's any theft, it's very small scale-certainly not enough to warrant Elizabeth losing her job."

Elizabeth is responsible for monitoring theft of goods from the premises, especially food and booze. There is no way Mr. Lagarde can check this precisely, but he does as close a job as possible. Booze, especially, is carefully inventoried.

"Why is the business up for sale?" asked Mollie? "And how long has it been under current ownership?"

"The owner founded the business about twenty years ago. Initially it was a hotel. The current brothel business evolved over time, and exists in its present form only for the last five or six years. Mr. Lagarde is now 60 years old and tells me he wants to retire. He says he no longer wants to travel to Povera as often as necessary to manage the company."

Jim looked to Mollie for permission to continue. She nodded. "There are three classes of employees. There are the girls-the prostitutes. They are paid only if they generate revenue-on commission if you will. We'll get to them later.

"Then there is the service staff. These are all women, supervised by Elizabeth, who interact directly with customers. They are responsible for food service, room cleaning, picking up after the girls, and so on. Most of them are former prostitutes.

"Finally are the support staff, who do not typically interact with the customers. Most of these are men. They include the cooks and the laundrymen, maintenance staff, some back office people, and the fellow in charge of hiring prostitutes (his name is Ronaldo). Very important is the security staff-headed by an Indian fellow named Rajiv. They're essentially a small police department, with at least ten officers on duty at all times. They carry guns. Very occasionally a customer will get rowdy, but more often one of the girls is caught stealing or otherwise misbehaving. They're also responsible for guarding the perimeter, an important task since there's no effective municipal police department. The security guards are paid as much as $10 per shift, depending on skill.

"There are typically 30 service people on hand, and an additional 30 support people. The total obligatory payroll (again, girls get paid only when they generate revenue) comes to about $1000 per day. That's the payroll even if you have zero customers."

Mollie made some notes. She worked the arithmetic out for herself to see if Jim's numbers matched her understanding, which after some clarification they did. "So how do the girls get paid?"

"Ah, that's the interesting story. I told you this place was high tech. Each customer is checked in at the main lobby on the fifth floor. He receives an ID card with an RFID chip. He enters the club by swiping it through a turnstile, and that starts his 24 hour clock. On each purse is a card holder-as long as the customer's card is in her card holder, then she is his 'sex slave', if you will, and she is getting paid 30 cents per minute. That's $18 per hour! Recall that the going wage in Povera is $3/day for an unskilled worker.

"There are some rules. If she has the customer's card she's required to stay within a few feet of him. She can't just run off with his card. A girl who does that will get fired, pronto."

"What happens if she needs to use the lavatory?"

"She has to take him with her-yes, men can enter the ladies' lavatory. Nothing is off limits to them. Or she has to give him his card back."

"Okaaay."

"The second rule is the customer can remove the card at any time for any reason. She can't hide the card under her arm or something. She's got to keep it in easy reach.

"But with that comes the very important third rule. No man can touch a woman unless she has his card. He can't take away his card while he's touching her. Equally important, no woman can touch a man before he gives her his card. She can't sidle up to him to seduce him. The sell has to happen at a distance.

"The card system transmits data directly back to Switzerland. The payroll is completely automated-there is no way anybody in Povera can fudge the books."

"How many employees does Mr. Lagarde have in Switzerland?" Mollie asked.

"Ha! That's a good question. I don't know. Must be at least a couple.

"So there are 20 customers (if the hotel is full), each with a card entitling him to 25 hours (I can explain) of a prostitute's services at $18/hour. The theoretical maximum paid to the girls is $450 per day per customer, or $9000 total. In practice, however, the fellows don't spend all day with a girl-don't ask me why. On average they spend only about 60% of their time with the ladies-costing about $300 per day per customer.

"If the hotel is full (using round numbers), $20,000 in revenue will be generated. $6000 will go to the girls, and $1000 will go to the other employees. Approximately $1500 is paid for rent for the building, and $3500 covers all other expenses-food, drink, electricity, water, etc. The latter two are very expensive in Povera. So that's $12,000 in daily expenses, leaving $8000 for operating profit. If the hotel is full it's a good business."

"Of course that begs the question," interjected Mollie. "How often is the hotel full?"

"You can go through this data on your own, but I calculate an average 70% occupancy rate. The break even rate looks to me to be about 50%, so they're doing ok. 70% should net them about $3000 per day operating margin.

"I need to mention another important fact. Mr. Lagarde's rent on the building is $50,000 per month. He has a 10 year lease that expires in two years. A new lease will need to be renegotiated."

"That will have to happen before the deal can close," said Mollie, looking through the information binders. "I need to think about this. I assume I can keep all this information?"

"Yes, of course. But please remember to keep it confidential. And if you choose not to purchase the property-for your protection and mine-I would like it returned."

"No problem. I'll be in touch in a few weeks."

The Visit

Mollie followed Jim off the plane at Putaville International Airport. With no jetway, passengers stepped down stairs to the tarmac. There was no escaping the wall of heat and humidity, especially painful for those dressed for London weather.

To save money they stayed at the international hotel rather than Lagarde's. They'd reserved two adjoining rooms-an arrangement the desk clerk thought was odd. He figured they were married.

The next morning the security guard escorted them to the fifth floor lobby of Lagarde's Hotel & Spa. An attractively dressed older woman-presumably a former prostitute-greeted them as the elevator opened.

"Hello. Welcome to Lagarde's resort. I understand that you are special visitors. This is a card that will give you access to all parts of the hotel, including the employee spaces. It will not cover the services of any of our hostesses, nor do you have a room here. You may, however, eat and drink as a guest in any of our restaurants and lounges. Have you been to our hotel before?"

"No," answered Mollie.

"You may wish to look at the introductory video we show to our first-time guests. It's entitled How to enjoy your visit to Lagarde's Hotel and Spa. Would you like to watch that?"

Mollie chose the English version so Jim could listen in. It was dubbed-the original was in French.

[A smiling, dusky beauty, dressed in a summer skirt with matching blouse, walks into view from stage left.] Hi. My name is Linda, and I'm proud to work as a hostess at Lagarde's Hotel and Spa. I would like to tell you how you can get the most out of your stay here. [The camera zooms to her face.] Lagarde's is the elite sensual spa in the world. Our beautiful young ladies-like me-are here to serve your every whim and desire. In addition we have elegant rooms, fine dining, a superb gym, and trained masseuses. All of this is included in the price you have already paid.

When you enter the hotel you will be given a card. It looks like this. This card allows you access to all our facilities. You can carry your card in one of three ways. Around your neck, on your wrist, or in the handbag of your favorite hostess. [Quick shots of men modelling the neck and wrist options. Then a view of Linda's handbag, with a close-up showing how the card fits in the outer pocket.]

By sharing your card with a hostess, she becomes your faithful servant. Perhaps she can give you a massage? Or you can take her back to your room for a roll in the hay? Whatever sensual experience you want from her is available to you. Some of our customers like to dress their hostesses up in costumes. More of them prefer to have them naked. However dressed or undressed you want her, she'll go around just as you please.

Oh! You want me naked? [Linda starts to unbutton her blouse. The camera cuts away. You next see her walking from stage right, wearing shorts and a t-shirt. Camera zooms to her face.]

You can keep the same hostess for your entire stay if you want to. But we don't recommend that. Our customers have more fun if they sample a variety of hostesses during their visit.

Jim whispered in Mollie's ear: "That's the nudge from the house. The resort doesn't have to pay for the shopping around time. So it saves Mr. Lagarde money if the customers trade off hostesses."

Please note that there are some common-sense rules for safe behavior. You need to use a condom for any sexual contact. Your hostess will have a supply for you. Also, anal sex is not included except by special agreement with the hostess. She may ask for more money, which like any other additional fee, will be charged to your card. Finally, you may not hurt, injure, or tie up our hostesses. Your hostess or any member of our staff can explain the limits of acceptable behavior.

What can you do with a hostess without lending her your card? You can look at her. You may not touch a hostess (nor can she touch you) unless she has your card. Once she has that, then you can touch her any where and anyway you want. She's got the card, and you've got the hostess.

Each hostess has a number on her handbag. Please make a mental note of this number so you can keep track of her. If she has your card she is not allowed to wander away from you (unless you ask her to fetch something).

You will notice some colored lines on the floor-they are red and yellow. It sounds very complicated, but actually it's pretty easy.

Please do not cross any red lines. They separate our guest spaces from employee-only spaces. In order to give you the best experience we need to have some backstage areas. Please don't peek. In the unlikely event your hostess has to cross a red line, she is required to return your card to you.