For those that are quick to say kick em to the curb, remember, these are people. People are stubborn, naive and just plain stupid sometimes. But a good boss gives people the opportunity and the encouragement to do better. If people are left to do their own changes how they see fit then most of the world would never change. A Leader leads, a boss gives orders. It's worth it to give people the reality of the situation and give them a chance to work it out first.
The question he must ask himself is with all the pages here of obstacles and hoops he has had to jump and sleepless nights not to mention the dollars out of pocket and his business being under a microscope(Being a New Establishment) is taking the chance on these type of people worth the risk?
With New Customers you get one shot most of the time.... When you have pleased one customer that customer will bring you 5 new customers on the average.... However if you offend one customer you would have offended 250 potential new customers because Bad news travels quicker than good news due to human nature.