Jason Wiener, a lawyer and chair of the Colorado Employee Ownership Commission, has launched the financial model for an employee-owned holding company that he believes will streamline the process and offer an appealing exit path to retiring business owners. And, for now, he’s focusing on restaurants within a 500-mile radius of Denver. Called the Main Street Phoenix Project, it operates like a private equity firm, providing capital to acquire a business, then immediately transitioning it to employee ownership. The mission: to align wealth creation for workers with the success of the business at large and reduce turnover. Funding comes through mission-driven investors recruited through a private offering, grants, and a crowdfunding campaign that’s about to launch.
Wiener hopes the project will help transform what he calls a “broken [hospitality] industry,” whose fundamental flaws have been exposed even more during the pandemic. “Now it’s having to reinvent itself,” he says. “Workers are what make the dining experience so palpable and memorable to people. It’s not that surprising that restaurants are struggling so much to recruit people. We need to prize that aspect of business more than short-term profit.” To that end, Wiener says Main Street Phoenix is committed to moving beyond the tipped-wage system and educating consumers about what that might entail.
Under this worker cooperative model, any employee who’s been with an acquired restaurant for at least nine months is eligible to become an owner six months after the acquisition is finalized. They must then buy one share for $1,500, which can be paid for through payroll deductions for up to two years, and will receive yearly dividends based on hours worked as well as profit-sharing opportunities.
Once the holding company has a portfolio of restaurants, says Wiener, it can offer benefits like health care and 401(k) plans that might be prohibitive in cost for a single restaurant to offer.
Main Street Phoenix has yet to close a deal—though a few have come very close—but Wiener says there are some “promising opportunities.”
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