Maine-based restaurant chain is testing new employee ownership model

Sam’s Italian Foods, which has 14 restaurants and is based in Lewiston, was sold last year to Teamshares Inc., a New York-based startup that helps small businesses transition to employee ownership. Sam’s Italian, founded in 1939, was sold by Richard Michaud, who started as Sam’s employee in 1988 and eventually, together with his wife Wendy, took over the business.

There are 14 sites – two in Auburn, five in Lewiston and one in Augusta, Brunswick, Dixfield, Freeport, Lisbon Falls, Rumford and Topsham. The Freeport site closed in 2021, citing staff shortages, but was due to reopen this summer.

Teamshares is a Series C funded company that buys small businesses from retiring owners. All employees are retained and earn shares in the company. Teamshares bought 51 businesses across the country. Sam’s was Teamshares’ first acquisition in Maine.

John Boyan, broker relations manager with the firm, became the new president of Sam’s Italian on February 1. We asked Boyan how the action plan went. Here is an edited transcript.

Mainebiz: How has the employee ownership model fared since Teamshares acquired Sam’s Italian?

John Boyan: The high level thing to know is that we have now issued shares to our 67 employee shareholders. They all have a stake in Sam’s Italian Foods. The advantage is that they are now treated as owners. When we make a profit, we are able to distribute it through property.

MB: How much of the business do employees own now?

JB: Employees now own 10% of the company. We had our first employee share ownership education session, to communicate what a share is and how we determine its value based on the valuation of the company: “If we are more profitable, the value of your actions increase. If we are not, the value goes down.’

MB: When do employees become fully invested in their actions?

JB: Once you’ve been here for four years, you earn 100% of your shares.

MB: How do employees realize the cash value of their shares?

JB: When an employee retires, Sam’s buys back the shares at the stock price. So if you’re fully invested in your stock, which means you’ve been with Sam for four years since the transition took place or since you were hired, and if you decide to leave the company, Sam’s would pay you cash out based on the total value of your shares.

MB: Does the model provide the ability for employees to see cash more immediately?

JB: The other way to put real money in their pockets is to issue dividends. If we are able to generate healthy cash and we decide as a company that it makes sense to pay dividends to employees, we will.

MB: To what extent does Teamshares distribute dividends across its entire portfolio?

JB: It depends. We review this quarterly. Sometimes you need more money in the business and sometimes you can distribute the profits.

MB: What is the process for Teamshares to distribute shares?

JB: They made it pretty simple. Employees register through a portal. We sent out everyone’s stock awards at the end of March. People just have to accept their shares and Teamshares is able to legally declare every employee as the owner of the business.

MB: Will you increase the level of employee share ownership?

JB: Our goal over the next 10-15 years is for Sam’s to be 50-80% employee owned.

MB: Why doesn’t Teamshares turn companies into majority employee ownership right from the start?

JB: When you go to employees and say, “Hey, do you want to buy the company and be the majority owner? they might say, ‘I don’t know what that means.’ Teamshares wants these companies to be successful for the long term, so they’re taking a thoughtful approach by buying it out and owning the majority stake upfront — buying it, essentially, on behalf of the employees — then buying it back over time. their values ​​in shares, so that employees can become majority shareholders.

MB: How does this model increase the overall value of a business?

JB: When you’re an owner, you’re generally happier at work and more productive. We believe this comes with significant success in terms of business performance.

About Vivian J. Smith

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