Hell’s Kitchen, the cheekily named restaurant in downtown Minneapolis that’s known for its house-made peanut butter, lemon ricotta pancakes and crazy huge bloody Mary bar, is turning over ownership of its operations to employees.
Instead of selling the 17-year-old restaurant to outsiders, owners Cynthia Gerdes and Steve Meyer (co-founder and Gerdes’ husband, Mitch Omer, died in 2015) are creating an ESOP (Employee Stock Ownership Plan), which lets employees buy the company with future profits.
What that means is that employees won’t pay for it directly out of pocket, but will use profits from the restaurant to pay Gerdes and Meyer over time.
The government-regulated ESOP will be set up as a trust to provide retirement funds to almost all full-time and part-time employees who have been with the restaurant for at least a year.
When an employee leaves Hell’s Kitchen, the company will pay them the fair market value for their earned shares.
The entire current management team will stay intact, running operations as usual, and a board of directors will help with strategic planning. St. Paul-based Bremer Bank will operate as the ESOP Trustee to ensure all regulatory laws are followed.
Gerdes explained the move in a letter to patrons thusly:
“Back in 2002, Steve Meyer and I grabbed onto my husband Mitch Omer’s dream and founded Hell’s Kitchen. Over the next 17 years, we survived a million ups and downs, including not only our beloved Mitch’s death in 2015, but also the restaurant’s near death in 2017 after a string of barely profitable years.
“Unwilling to give up, General Manager KJ Granberg and her remarkable team of leaders grabbed the reins of the company, worked their magic (and industry knowledge), and returned it to profitability almost immediately. Their work over the past 2 years has proven that “the harder you work, the luckier you get,” and now Hell’s Kitchen is financially healthy and thriving, not just because of these managers’ efforts, but also because of the hard work our entire staff put in to bring us from the brink of insolvency to the solid position we’re now in.