As an outside consultant to Allan Fingerhut, what would you recommend that he do? Should he try to make the business work with his partners?

Should he take control of the business himself?

The bill arrived early last year. According to the notice, Allan Fingerhut’s Minneapolis nightclub, First Avenue, owed $170,000 in overdue real estate taxes. It wasn’t the first indication of trouble at the club—which Fingerhut had entrusted to his childhood friend Byron Frank after moving to California and starting a new business. And it wouldn’t be the last. Staring at the notice, Fingerhut wondered whether mixing friendship and business had been such a great idea after all.
First Avenue had been a Minneapolis institution since the 1970s, helping launch the careers of artists such as Prince and the Replacements. But revenue at the club had been sliding since 2002. Fingerhut’s relationship with Frank was suffering as well. Since moving west in 1988, Fingerhut had had little direct involvement with the nightclub. Though he reviewed quarterly financial results and wrote the occasional check, he no longer knew who was headlining on a Saturday night; he visited just once a year. For years, the arrangement had worked out fine. But Fingerhut had come to regret his hands-off approach. Was it too late to step in and save his business?
Doing so would not be easy. Fingerhut and Frank had been pals since they were 8 years old. In 1969, at the age of 25, Fingerhut signed a lease on a former Greyhound bus station in downtown Minneapolis and transformed it into a live music venue, the Depot, which he later renamed First Avenue. Frank soon joined him. Though Fingerhut was the club’s sole owner, the two ran the place like partners.
Fingerhut focused on marketing and strategy, while Frank, a CPA, maintained the books. Nightclub veterans Steve McClellan and Jack Meyers handled day-to-day operations, from overseeing the bar staff to booking acts. Throughout the 1970s, the club was a critical and financial success.
In 1983, First Avenue was the setting for Prince’s cult movie Purple Rain, which sent the club’s fortunes soaring even higher. But the years of late nights and loud music were taking a toll, and Fingerhut was getting burnt out. In 1988, he and his wife, Rose, decided to focus on a more subdued business in a warmer climate.
They moved to Marin County, California, where they established a fine-art publishing company in San Rafael and an art gallery in Sausalito. Fingerhut says he never had a doubt about leaving First Avenue in the hands of his buddies back home. “I knew these guys shared my objective to keep the arts alive in Minneapolis,” he says. “I thought they would never do anything to risk losing it.”