How Does Groupon Work?

THANKS in advance for refreshing my memory!

A business owner told me how his groupon worked once, but I forgot.

I downloaded a Groupon, Valpak, and MoneyMailer app on my phone just to be more familiar with the local advertising competition.

It reminded me that I have forgotten how Groupon works.

I've heard horror stories of businesses being overwhelmed by response but complaining they're going broke.

The local guy I asked said it basically was used by existing customers so was not meeting his goals at the time, though I fail to remember our discussion of it's mechanics.

Does groupon keep 50% of the advertised price they collect?