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This project saves struggling restaurants by turning the workers into owners
Key Excerpts from Article on Website of Fast Company
Posted: October 4th, 2020
https://www.fastcompany.com/90557776/this-project-saves-stru...
When the Main Street Phoenix Project buys a distressed restaurant, it will turn the workers into owners, making the industry more equitable. The hypothesis was that we needed to accelerate, streamline, and simplify the process of converting to employee ownership, says Jason Wiener, a partner in the new venture. This was about taking a traditional, tried-and-true business strategy - the private equity firm - and using the tools of concentration and capital efficiency and deploying it not for the benefit of investors, rather, for the benefit of workers. As an attorney, Wiener has spent years helping small businesses convert to employee ownership, a process that can raise both profits and worker compensation. But the work was slow, and he realized that the response to the pandemic needed to happen much faster. He was particularly concerned about workers at restaurants, who are often women, people of color, or undocumented, with little savings to survive on if they lose their job. By bringing new capital to the table, from mission-aligned, patient investors, we could buy businesses at significant value, we can hire their workers back, put them into ownership position, and lock in all of that improved cash flow and all that gain in value for the benefit of workers, he says. After developing the financial model, the partners are now beginning to raise capital and expect to acquire the first restaurant by the end of the year, with plans to acquire around 25 over the next two years.
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