Courtesy / Teamshares
John Boyan
May 22, 2022
Stock ownership roll-out begins for employees of Maine eatery with 14 locations
COURTESY / SAM’S ITALIAN
Sam’s Italian Foods, a chain of over a dozen restaurants dating back to 1939, recently sold to a startup that buys small business from retiring owners and transitions them to employee ownership.
Sam’s Italian Foods, a chain of Italian restaurants centered in the Lewiston-Auburn area, recently sold to Teamshares Inc., a New York-based startup that assists small businesses as they transition to employee ownership.
Sam’s Italian, founded in 1939, previously belonged to Richard Michaud, who is retiring after working at Sam's with his wife, Wendy, since 1988. There were 14 locations — two in Auburn, five in Lewiston, and one each in Augusta, Brunswick, Dixfield, Freeport, Lisbon Falls, Rumford and Topsham. The Freeport location closed in 2021, but is expected to reopen.
Teamshares, founded in 2019, is a 70-plus-person, remote-first, Series C-funded company that buys small businesses from retiring owners. All employees are retained and earn stock in the company. Teamshares has purchased 51 businesses nationwide. Sam’s was Teamshares’ first Maine acquisition.
According to the Teamshares website, employee-owned companies outperform traditional peers with 14% more profitability and 25% greater survival rates in recessions. The company’s model provides capital employees don’t otherwise have to buy a business, grants equity over time and retain a share of the company itself.
John Boyan, a broker relations lead with the firm, became Sam’s Italian’s new president on Feb. 1.
We asked Boyan how the share program rolled out. Here’s an edited transcript.
Mainebiz: How has the employee-ownership model unfolded since Teamshares bought Sam’s Italian?
John Boyan: The high-level thing to know is that we have now issued shares to our 67 employee-owners. They all have a stake in Sam’s Italian Foods. The benefit is that they are now treated as owners. When we make a profit, we’re able to distribute the profit through ownership.
MB: How much of the business do employees now own?
JB: Employees now own 10% of the business. We had our first session yesterday doing employee-ownership education, to communicate what a share is and how we determine its value based on company valuation: ‘If we’re more profitable, the value of your shares increase. If we don’t, the value decreases.’
MB: When do employees become fully vested in their shares?
JB: Once you’re 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 will buy back the shares at the share price. So if you’re fully vested in your shares, which means you’ve been working at Sam’s for four years since the transition took place or since you were hired, and if you decide you’re going to leave the company, Sam’s would pay you cash based off the total value of your shares.
MB: Does the model provide the possibility for employees to see cash more immediately?
JB: The other way we can put actual money in their pockets is by issuing dividends. If we’re able to generate healthy amounts of cash and we decided as a company that it makes senses to issue dividends to employees, we’ll do that.
MB: To what extent does Teamshares issue dividends across its portfolio?
JB: It depends. We review that on a quarterly basis. Sometimes you need more cash in the business and sometimes you can distribute the profits.
MB: What’s the process for Teamshares to distribute shares?
JB: They’ve made it pretty simple. Employees sign up through a portal. We sent out everybody’s share grants at the end of March. People just have to accept their shares and Teamshares is able to legally file each employee as an owner of the business.
MB: Will you be increasing the level of employee ownership?
JB: Our goal over the next 10 to 15 years is to get Sam’s to be 50-80% employee-owned.
MB: Why doesn’t Teamshares move businesses into majority employee ownership from the get-go?
JB: When you go to employees and say, ‘Hey, do you want to buy the business and be the majority owners?’ they might say, ‘I don’t know what that means.’ Teamshares wants these businesses to be successful over the long run, so they take a thoughtful approach by buying it and owning the majority stake up front — buying it, essentially, on behalf of the employees — and then over time buying down their equity values, so employees can grow into being majority shareholders.
MB: How does this model increase the overall value of a business?
JB: When you have ownership, you’re generally happier at work and more productive. We believe this comes with significant business performance success.
MB: Any other developments?
JB: We’re planning to reopen our Freeport location. We’re targeting early to mid-June. We’ve made some hires. We’re working on refreshing that building. We have three people there and are looking for at least five more individuals. We also just launched DoorDash in some of our stores to allow customers to get Sam’s delivered and to be able to reach a larger customer base.
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