Restaurant cooperatives, from employees to owners

Restaurant cooperatives, a restaurant business model that emerges from the crisis in the sector.

This is an interesting concept. Honestly, I don't know whether it is new, but it is to me. I read about it in an Argentine media outlet and I find it definitely interesting, because it offers a new alternative for keeping a business going when it is about to close.

What is the restaurant cooperative model?

The idea, as I said, is very interesting. It focuses on a restaurant that is about to close passing into the hands of its employees, who become the owners and the people in charge of turning it around.

It is based on employees using their savings to work together to reopen the restaurant or to keep it from closing and thus continue with the project.

Challenges and opportunities for employees who become owners

• 1 – Without a doubt, an employee who becomes an owner will feel firsthand the stress that usually falls on an owner's shoulders, so they will have to be consistent and keep a positive attitude that lets them keep going and not give up along the way. At last, they will understand why some owners tend to act in ways people don't understand or why we sometimes seem annoyed.
• 2 – The work will be heavier, and employees who were used to dealing with activities beyond their old position will have an easier time, but those who limited themselves to just doing their job will find it harder.
• 3 – You have to look into every legal aspect that allows a true transfer of the business. You also have to research everything related to the legality of cooperatives of this kind, unless you want surprises along the way.
• 4 – You have to study topics you probably don't know. I am not talking about formal studies, but about self-directed preparation that lets you learn about the restaurant management topics you are going to face.
• 5 – At first, each person's earnings probably won't be very good. In fact, if it is a reopening after several months closed, profits are likely to be zero at the start. But if things are done right, you shouldn't doubt that everything will improve and that the venture will represent a huge opportunity to earn more compared with the salary you used to receive.
• 6 – There definitely has to be someone with a higher rank in the group, someone in charge of giving orders and ultimately leading the group. It wouldn't work with the idea that we are all equal and we all should lead; in fact, I think doing it that way would be something like a plane with no pilot.

From a restaurant owner's point of view

As a restaurant owner, when things go wrong, I have not been immune to that terrible feeling of thinking about closing. The "horrible" part is not so much the closing of the business itself; at the end of the day, most restaurant owners have an entrepreneurial streak, and later on we will be starting another business without a second thought.

The saddest part at least for me is the situation of the people who are left without jobs, because their source of income disappears and that is a real problem. I don't mean to say that watching one of your dreams as a restaurant owner come to an end isn't sad, but I think that is nothing compared with the guilt you can feel when the people who trusted in your project will be without a job in a few days.

That is why, from my point of view, restaurant cooperatives are a case study every restaurant owner should know, because knowing them well can indirectly offer a kind of insurance, one that will keep the closing of your business from leaving your employees in a bad spot and will give them the chance to try to manage or steer the ship. And who knows? Maybe they can do things better than you and end up succeeding.

On the other hand, you take away all that emotional burden and that sense of guilt if you have to close and leave your employees without their source of income, which, I repeat, for me is more horrible than anything else. (It makes me think about how Will Smith felt in the movie Seven Pounds (Siete almas).)

As an additional comment, I want to answer this unrelated question that may come up:

Would this model work if it were about opening a new business among a group of friends who want to start a venture?

Personally, I don't think so. Maybe it would work, but I believe it is difficult, because reaching an agreement in large groups is really complicated, and it is even more so when you have no experience as a business owner and have never had the chance to be part of a well-organized board.

Ten people start, but in the end three or fewer are left. It is the same story over and over when friends start a business together.

In conclusion, cooperative restaurant initiatives should be analyzed by restaurant associations and by associations that focus on supporting local entrepreneurs, so that they can somehow ask governments for support, because I believe this is a model that can be of great benefit to any country.

If you want to read the specific case in Argentina, I invite you to check the link to the Argentine outlet that published it so you can learn more details about how they are doing it in that country.