Can a Worker-Owned Restaurant … Work?

by Tobias Coughlin-Bogue

(This article was originally published onReal Changeand has been reprinted under an agreement.)

Restaurants run on hierarchy, or so I've always been told. There's got to be someone in charge, someone giving orders, in order for the whole thing to run right. Whatever situation you find restaurant work analogous to, be it the military, a sports team, or an orchestra, there's someone calling the shots.

The last person I worked for, one of the most experienced and talented restaurant people I've ever met, always said it's best to run a restaurant as a "benign dictatorship." Under her leadership, which was very much from the front, that didn't seem so bad. She'd done every dirty job in the place and didn't hesitate to do them every night alongside the rest of us.
But that's not every restaurant owner.

I've worked at plenty of places where the owner was just in the way. Or worse, as was the case of the owner of a "fine casual" Vietnamese restaurant I worked at. Notorious for bawling out his employees, he'd sit at a corner table every night, drinking whatever red wine was left open the night prior and glowering at us. Suffice to say, wondering when he would fly off the handle and what would set him off did not make me a faster or better server.

The first restaurant I ever worked at was more of a "good cop, bad cop" situation. One half of the Microsoft alumni duo who owned the place was always around cheering people on and helping with the host stand. His counterpart, on the other hand, only showed up with women he wanted to impress, which he did by ordering the entire menu and comping it for himself. You can tell a lot about an owner based on whether they pay when they come as a customer, but that's a different article.

The point of this article is that maybe there's a different way to run a restaurant. A way where it isn't whether you've got a dud in charge, but where there's no one in charge — or, rather, no one person. Where, instead of "taking ownership" of their jobs in the jargony, buzzword sense of it, employees literally take ownership.

Enter Jude's, a fully employee-owned restaurant in Rainier Beach.

'Anarchy Works'

Jude's opened in 2015, as the second restaurant under Beau Mason, the owner of popular Columbia City bar Lottie's. Tucked away in "old town" Rainier Beach, it had a rough start, says Mark Paschal, longtime bar manager under Mason and current member of the ownership collective.

"Still, to this day, we get people who have lived in the neighborhood for 10 years who have never heard of us," Paschal said, sitting at the corner of Jude's cozy, eight-seat bar.

The restaurant has built itself up to a point where it is, if not profitable, at least sustainable, since those days, Paschal says. But Mason wasn't interested in an uphill battle, and he eventually decided to sell the place. Paschal had moved on a couple years prior, but regulars who heard about the impending sale got in touch to tell him that if Jude's was to be sold, it should be to him.

Paschal put together a bid alongside his then boss, a vermouth importer named Leith Shenstone. When they got ahold of the place in January of 2020, they "ripped almost everything out of it." Their dream, he says, was to open the ultimate neighborhood restaurant. To wit, the website assures guests, "We're here when you don't want to cook but still want to feel at home."

They didn't have a phone or any reservation software for three months, Paschal says, hoping to build an audience based primarily on proximity and word of mouth. They also didn't have furniture or a liquor license, at least for opening day. Instead, they got a banquet permit and just gave out free drinks.

"Partly, it [was] a statement of intent. We're not just trying to take money out of the neighborhood and bring it into our pockets. We want to be a resource for the neighborhood," Paschal said. They're serious about the neighborhood restaurant thing.

The pandemic took their Luddite ambitions and dashed them on the rocks, forcing them to go fully digital and embrace every carryout and delivery app known to humankind.

"The first month was fucking chaos," Paschal said.

As someone who worked in a full-service restaurant during the onset of the pandemic, I think that might be an understatement. Either way, that chaos made it not very fun for his business partner, who moved to Cle Elum during the pandemic to be closer to grandparent-based child care and whose vermouth warehouse was all the way on the north end of Seattle. For Shenstone, trying to manage reopening for dine-in from afar offered none of the "fun parts" and all of the "headaches." Shenstone suggested Paschal buy him out.

"He's like, 'I helped you get this place because I want you to have a place for yourself. So do you want to buy me out? And you can do, like, your worker-owned or profit sharing. You always had this in mind,'" Paschal said.

Indeed he did. Paschal has a doctorate in history from the University of California, Santa Cruz, where he studied revolutions — specifically, how to bring them about. While he makes more classic cocktails than molotov cocktails, he is an avowed anarchist. Jokes about incendiary devices aside, he really is the kind of capital "A" Anarchist who is interested in coming up with alternative ways to organize our socioeconomic relations. The kind who you might find at a reading group. Or who, say, converts their funky neighborhood Cajun joint into a worker-owned collective.

"I'm more of an evangelistic person in my anarchist beliefs, and so every opportunity that I meet someone is an opportunity to show someone that anarchy works," he said.

A New Approach

When he took over the business, he presented his workers with three ways forward, Paschal says.

Option one was to keep Jude's as a traditional sole proprietorship, where Paschal calls the shots and collects the money. Option two was a profit-sharing arrangement, where he calls the shots but the money is split among everyone working to generate it. Option three was a worker-owned collective, which he made clear was his preference.

"People were like, 'I don't know. I'd never heard of anything like this before, but let's try it,'" he said.

That was in March 2022. The founding four employees finished working out the bylaws in December of that year. To be a part of the ownership collective, people need to buy a share, at the rate of $1,000. The business has been slowly buying Paschal out of his majority ownership down to a $1,000 share, on par with his compatriots. Employees are eligible to join the ownership group after six months of employment. It is possible to work without ownership after the six-month period, but to do so requires an approval vote from the member-owners.

Since June 2022, wages have been set to a flat $19 per hour for everyone, plus tips. Jude's originally guaranteed $25 per hour after tips, which are split evenly across all staff, but bumped that up to $30 per hour in January 2023, Paschal says.

As for making business decisions, it's done democratically. The entirety of the member-owner group votes on major decisions, and the bylaws outline scenarios where employees are authorized to act independently of a vote (e.g., the restaurant is flooding and someone needs to hire a plumber immediately). Because it can be hard to get everyone in the same room, most votes are held via a Discord server. People respond to proposals with a thumbs-up emoji for yes, a thumbs-down for no, and a monocle to signal they want further discussion — a closer look, if you will.

"It's a lot of the same effort that other jobs I've worked at have required: There's a group chat, [and] you better be part of that," said Joshua Rice, one of the collective's four co-founders, chiming in from behind the bar. Participating in the administrative work is, he said, "a small sacrifice to make for a place that I'm actually a co-owner in, when a run-of-the-mill job is still going to require the same crap anyway."

Approval of any proposal or purchase has to be unanimous, Paschal says, because "the idea is, there's not winners or losers." If there are no votes or monocles on a proposal, it gets discussed at the monthly all-member meeting. Either the proposal is revised to be agreeable to everyone or it's scrapped. The end result, while adding lots of process, is that no one has to abide by anything they don't agree with.

The bylaws are 10 pages long and cover just about every eventuality the group might encounter. There are precise formulas for how profits, interest, and expenses are shared. I won't bore you with the minutiae here, but anyone interested in the financial particulars of employee ownership can find lots of resources online. Or contact Paschal, who says he's eager to help other entrepreneurs explore the worker-owned model. In the long term, he's even eager to help current members of the collective spin off their own restaurant dreams.

"We want all of us to succeed in the ways that we want to succeed," he said.

So, is Jude's succeeding?

While the members aren't rolling in it — they haven't made a profit yet, so they haven't had anything to split up — they are doing quite well by every other metric. The old adage is that 9 out of 10 restaurants close within 10 years. Jude's is approaching 10 years in business, it's open six days a week, it employs 10 people, and those people get paid quite well.

Jessi Clark, who found out about Jude's via an ad on the restaurant jobs board Poached, says the $30 per hour wage was actually what attracted her in the first place.

"Yeah, it was the good pay that caught my eye," she said. "And then I was like, 'That's really cool that it's worked-owned.'"

She's been there since April and is looking forward to joining the ownership collective upon reaching her six-month mark. The Jude's model, she says, was a breath of fresh air.

"Everything's even," she noted. "I mean, as a cook, you're generally just shoved back there and it's like, 'Here's a paltry sum of money,' while everyone [else] makes tips."

An Industry Divided

Clark's elation at $30 an hour — what most line cooks would consider very high pay — gets at another exciting potentiality of the worker-owned model: It could end the front-of-house (FOH)/back-of-house (BOH) pay gap, one of the most perfidious ways the restaurant industry pits workers against one another.

While BOH employees — cooks, dishwashers, expediters, etc. — often make higher base hourly wages than FOH workers, waiters and bartenders keep the bulk of their tips, giving only a small "tip out" percentage to kitchen staff. The result is sometimes staggering gaps between the take-home pay of FOH and BOH workers. Break down who works in what sector of the industry by race and gender, as the Restaurant Opportunities Center did in its groundbreaking report "Racial and Gender Occupational Segregation in the Restaurant Industry," and things get really bleak.

According to the Center's data, a white man working in a Tier I restaurant (which it classifies as fine-dining or fancy places) made $15.15 per hour on average, compared with $10.49 per hour made by a Woman of Color. The report also found that Black and Hispanic workers were wildly overrepresented in BOH positions, which are historically much lower paid, while women in FOH positions skewed heavily toward Tier II (more casual, less lucrative) restaurants. Not cool.

What is cool is that, at Jude's, those divides simply don't exist. Paschal, having experienced life as a "superstar" bartender, wanted to create a completely different dynamic.

"So, just like universities rely on superstar faculty, bars rely on superstar bartenders, and they get paid commensurately," he said. "But everyone else in the restaurant gets paid so much less because it's like, 'Well, I'm the reason that everyone's here.'"

But that's not actually the case, Paschal noted. Creative labor is important, of course, but so is plain old labor.

"If I had no one to wash dishes, if I had no one to cook food, it all falls apart," he said.

After working in restaurants with rigidly defined roles and ranks, I was particularly curious about how that flat structure plays out during service.

Really well, it turns out. While I didn't see Jude's during a rush, I did see Rice and his fellow FOH worker Avery Lambert seamlessly sharing the duties of mixing drinks, running food, and attending to customers. Rice stayed behind the bar a little more, while Lambert leaned toward table service, but no one needed to tell anyone else what to do.

"I think we benefit a lot from being such a small operation, too," Clark said. "So we don't necessarily need the coordination that a restaurant with, like, five different stations and different parts of the building would need."

While there are people with different skill sets — Clark comes from a BOH background, while Rice and Paschal have spent the majority of their careers making craft cocktails — "we work together, and whoever's most knowledgeable about a thing, we'll go to them for that specific thing. If none of us are, we'll figure it out together," Clark said.

Cross-training is a big part of the plan for Jude's, Paschal says. Ideally, everyone will eventually be able to work every job, both to promote the spirit of equity and add flexibility to the business.

"We do a lot of mixing it up," Clark said. "No one's stuck on dishes all the time."

As for quality assurance, something a lot of micromanaging owners tell themselves they're there to do, I can assure you everything was quality. The Mermaids Tears, a bright-blue cocktail made from white rum, local-ish blue curacao (from Vancouver), Mexican coconut liqueur, pineapple, and lime, mixed up by Rice for my visit, was incredible. Bracing, astringent, pleasantly acidic, and just sweet enough. The Tabasco Caesar that accompanied my shrimp po' boy put my raised eyebrow — why mess with a classic? — to rest, delivering a surprisingly perfect Cajun twist on a classic. Matt Browning, Real Change's stalwart volunteer photographer and my companion for the meal, made his fried chicken sandwich disappear in record time, which I interpret as a hearty endorsement.

"I'm interested in what happens when people get together and mix and create something better than themselves. And I think cocktails are a really fantastic illustration of that," Paschal said.

I agree. A good cocktail, dish, or, in this case, restaurant has gestalt; it's greater than the sum of its parts. Jude's parts come together to form a welcoming, convivial neighborhood joint. It is delivering exactly the experience it promises to, which is the highest compliment I can pay a place.

Owners in Crisis

But besides being better for workers and better for customers, what about owners? If the workers run the restaurants, what will become of American dreamers striving to make their way into the petit bourgeois? A better question might be, "What's happening to them right now?" Nothing good.

The National Restaurant Association estimates that 1 in 3 restaurants closes in its first year. Per Forbes, closure rates are higher for restaurants with fewer than 20 employees. It's a grueling business, one where most owners don't end up in the running for a James Beard award or on a Food Network special, just broke and with back problems.

The old bargain, where the business owner takes on all the risk and all the responsibility for the entire share of any eventual profits, isn't always a favorable one for owners. Because labor is far and away the highest cost in any restaurant, many owners attempt to keep costs down by working inhuman hours.

Eric Sze, a co-owner of Manhattan's 886 Restaurant, told Eater in 2021 that he considers himself a "very lucky owner," because he was able to find staff after pandemic restrictions eased up. Eater also shared that he and "his co-owner, Andy Chuang, usually end up working around 18 hours a day, paying themselves $60,000 per year, but frequently will forgo a salary some weeks to make ends meet." Another pair of owners reported not having paid themselves at all since opening earlier that year. Still another owner reported that his servers and bartenders typically made more money than him.

While they are not technically workers, in the sense that they do not sell their labor for wages, these owners are still working their asses off. You might think that would put them in solidarity with the people they're mucking out drains and cleaning up spills with, but small restaurant owners were some of the most vociferous opponents of Seattle's 2014 minimum wage hike to $15 per hour.

What if, instead of being the backstop, the one who has to show up and shell out for a broken dishwasher or cover a shift last-minute, they were one of many people willing to do whatever it takes to make things work? Burnout is a crisis across the restaurant industry, but especially so for owners of small restaurants. It doesn't get as much attention, perhaps because we Americans love the idea of someone killing themselves for a profit, but it's not always good to be the boss.

That said, one of the most beautiful things about the classic indie restaurant model is that it allows for a lot of self expression. Really cool restaurants are often the result of one person's vision, developed and honed over a lifetime in the industry. Again, that creative labor has value. But by valuing equally the more mundane labor of the people helping to realize that vision, owners — or perhaps founders would be a better word here — can free themselves from the prison of individualism they're currently trapped in.

'It's Possible'

If it sounds like I'm singing the praises of the collective ownership model, it's because I am. As someone who has worked in almost every type of restaurant — from dive bars on up to ones with James Beard awards — I had yet to see a solution to what always seemed like the intractable, unconscionable inequities plaguing the industry. I've loved working in restaurants but have had to put so many things out of my mind to do it.

Is it fair that the dishwashers are mostly immigrants and they all make a third of what I do and work three times as long? No. Is it fair that a white man makes vastly more than a woman of color in the industry? No. But I always thought there wasn't much I could do about it. It was inevitable that the contradictions of capitalism, perpetuated by the capitalists in charge of our restaurant industry, would continue unchecked until the industry collapsed.

While the industry isn't exactly in freefall, restaurants are becoming stratified to the point where even working-class people can barely afford to dine out anywhere nicer than Chipotle and poor people simply can't afford to dine out anywhere. The Dead Prez lyric about flipping burgers — "Can't even buy one off what I make in an hour" — is actually true for an alarming number of restaurant workers. Years of worker exploitation, accelerated by the fallout from a global pandemic, have led to a disillusioned and disappearing workforce, forcing the remaining staff to do more for not very much more in wages.

Rising prices, caused in no small part by those modest wage increases, are finally letting the public in on the industry's dirty secret: Dining out has always been done at the expense of labor.

The only solution to that fundamental flaw in the restaurant labor arrangement that I've seen is an upsetting one: Owners are trying to eliminate labor by replacing servers with phone-ordering schemes and cutting down FOH staff to just a few glorified food runners. Ordering from your phone and having a harried, stressed worker show up some time later to drop off plates is a pathetic imitation of the full-service dining experience. It is inarguably unpleasant.

Sure, the rise of ToastTab probably isn't as bad as, say, the rise of modern American fascism, but we should still care. Some people see restaurants as a luxury, but they are not. Restaurant work is, as I'm fond of saying, the second oldest profession, and there's a reason for that. They are an absolutely crucial third place, providing people somewhere to be that isn't home or at work.

In America, where the lively public plaza is a rare and endangered species, restaurants are one of the only places where we regularly interact with people outside of our immediate social circle. We live in the age of isolation, and bars and restaurants are the most effective anti-isolation chambers we've got left.

Or, as Paschal, ever the architect of revolution, put it, they're "a place where solidarity can be built."

Whether you're planning to overthrow the capitalist order or just "don't want to cook but still want to feel at home," quality restaurants across the entire price spectrum are a hallmark of a functioning society. In that regard, the success of Jude's, a place that feels like it's sustainable for everyone involved, is about a lot more than just sticking it to the man. In Paschal's case, it's about proving the concept.

"I think more people are going to want to travel down this road as they see that it's possible," he said. It certainly does seem like the right route.

For me, going to Jude's, learning about their model, and seeing it in action gave me hope that this thing we love, this thing that is so fundamental to our social health, doesn't have to always include the things we hate about it. That there is not just a different way; there is a better way.

At Jude's, there sure seems to be: No gods, no masters, just damn good Cajun food.

Tobias Coughlin-Bogue is a journalist based in Seattle. His work has appeared in Vice, The Stranger, Crosscut, and Thrasher Magazine, among other outlets. He was most recently the associate editor of Real Change News.

📸 Featured Image: Avery Lambert checks inventory between serving drinks at Jude's restaurant. (Photo: Matthew Browning)