Eventually he may have to close. In addition, there are hidden costs. With capital held hostage, other sectors of the economy can't expand. New businesses, new products, and new jobs won't appear because the needed resources are tied up in inefficient production processes. In the long run, restrictions on business mobility lead to greater costs, higher prices, and lower real incomes.
Less mobility means less competition.
When a business firm moves into a region, it competes with local businesses and bids up the wages of local workers. Restrictions on business mobility prevent firms from entering new areas, thereby reducing competition in those regions. As time passes, competition is also reduced in areas companies wish to vacate. New firms are reluctant to enter a region that may, at some future date, prevent them from leaving. Taking hostages scares away potential employers.