State mandated closures and economic hardship this year have detrimentally impacted small businesses in Northeast Ohio. Phoenix Coffee Company, however, has decided to keep moving forward, despite these struggles. Recently, the small business announced their decision to move towards an employee owned initiative in the coming months, making it the first coffee shop in Ohio to do so.
When the days get cold and study times get long, you might find yourself craving a hot mug of local coffee and wandering into Phoenix Coffee Co. to order a boost of caffeine. Leather chairs sit by coffee tables, greenery flows off the shelves and clear jars of ingredients line the table behind the bar.
Emma Adams, a sophomore at John Carroll, says the small business provides a “calm and inviting atmosphere with consistently great coffee.” Adams loves how eco-conscious they are, commending their sustainable practices.
The small chain is the only “employee-owned cooperative coffee company” in the state of Ohio, according to its website. This big move did not come without help from Evergreen Cooperatives, which aided Phoenix Coffee with the transition.
Evergreen Cooperatives, through their Fund for Employee Ownership, is working to create a better Cleveland by encouraging and aiding small businesses to transition into employee-owned cooperatives. According to its mission statement, its goal is to “stabilize, revitalize, and transform communities and individuals.”
An employee-owned cooperative is a business model based on democratic voting principles. Every employee participates in management decisions through voting, which can range from new logo designs or electing one of their coworkers to a management position.
Every owner gets a say in the future of the business as a whole. Cooperatives, in turn, become ingrained in a community. Unlike the businesses owned by big corporations, employee-owned businesses remain part of that community and culture for many years to come. These companies will not simply move out of an area because money is elsewhere like the typical drive-thru Starbucks may do.
Though the process just began in October, the company is still working out how this new operating system will work within the company. Phoenix Coffee is working hard towards a democratic workplace, but some employees are still unsure about what happens next.
On a phone call with Kevin Strang, a barista from their Coventry location, he explained; “It’s still in early stages, so we’re still learning about it. … In upcoming months, we’ll know more.”
The Carroll News reached out to their management team to get a closer look at the company’s transition and more specifically why they choose a collaborative route. Christopher Fren, the cooperative’s general manager responded “We managed with a collaborative style, inviting managers into the decision making process for key decisions and offering benefits and profit sharing to all employees.”
“The transition to cooperative ownership seemed natural because of this—in many ways we already functioned like one,” said Fren, “it gives us the opportunity to formalize the practices we’d already begun and pursue our mission of creating equity for those who’ve contributed so much to our company over the years.”
This transition didn’t come easy because their previous owner could not exit until they found another form of funding. This search took years, thousands of dollars in legal fees, and “false start,” as Fren described. Luckily, the search ended when they found Evergreen Cooperatives. Both companies have worked together for a year and a half now to find a deal benefitting all parties involved.
What really sweetens the deal for the Phoenix Coffee Co. is, as Fren put it, “Evergreen’s expertise in cooperatively owned businesses means that we have access to legal, financial and administrative expertise to complete the transition and welcome our new owners.”
“As it exists today, Phoenix is formally and legally a worker-owned cooperative.” Fren explains, but there are some restrictions. There is still a board of directors as well as bylaws and a three-month stabilization period, this is to “iron out any lingering details from the old company and get a process membership approved.” As it stands, the Phoenix Coffee Co. will be fully prepared to welcome employee-owners sometime in Feb. 2021.
In the meantime the company will be continuing to write bylines so they match the company’s values. Fren would like to tip his hat towards his Co-General, Sean Hinde, “whose nuanced understanding of our company finances has really made this transition possible, as well as Evergreen Cooperatives- in particular their Chief Investment Officer, Jeanette Webster, whose experience and insight are matched by only her patience and persistence.”