Late last year, the team at the revered Little Red Door bar in Paris went on strike because of an ongoing legal dispute between co-owner Timothée Prangé and the venue’s majority stakeholders. Three months later, in early February, bar director Alex Francis and head bartender Barney O’Kane broke the news that they had departed Little Red Door, with Francis posting on Instagram: “Barney and I were forced to step down from our roles at Little Red Door at the end of January.”
This wasn’t the first time in recent years that disputes between stakeholders and owners have caused disruption to the on-premise scene – in October 2022, all but one of the team at Barcelona’s much-lauded Two Schmucks quit in response to the departure of Moe Aljaff, the venue’s co-founder & -owner. Aljaff cited “professional differences” with the other owners as his reason for leaving.
Being a bar owner, it seems, doesn’t guarantee longevity, and having one leave can result in an entire business losing its most valuable asset – its bartending team. Nor is opening a bar cheap, and the role of investors and shareholders is often shrouded in mystery.
So what does being a bar owner actually mean?
“Ownership has become a rather vague catch-all term,” says Kate Gerwin, co-owner of the Happy Accidents bar in Albuquerque, New Mexcico, which is 100% bartender owned. “I’ve seen bartenders claim ‘ownership’ of a bar while really they’re a managing partner or even just someone who receives profit-sharing.”
For Gerwin, a bar owner is someone who not only has financial equity in, but is also legally responsible for the business. “They’re tied to the liquor licence, the taxes, the lease or ownership of the property, the insurance and responsibility of the business,” she says.
Co-ownerships are common too, often split between ‘public-facing’ owners and ‘silent’ owners. Sam Boulton, head of creative & strategy for Kokushu Creative and former co-owner of Pineapple Club in Birmingham, England, was involved in such a partnership. “In my experience, I used to identify as the bar owner, but truthfully, it was a 50/50 partnership with someone else,” he explains.
“My co-owner was typically more hands-off. However, there were instances where they wanted active involvement in decisions. While I generally didn’t need their approval, occasional strong reactions required navigation.”
Finding the details of who holds a business’s voting rights or shares and, ultimately, makes the decisions isn’t that hard. In the UK, for example, Companies House lists this information freely. Finding investors, on the other hand, is a different story – though not necessarily a bad one.
At Happy Accidents, Gerwin and partner Blaze Montana’s investors were regular guests of Gerwin’s for more than 12 years who voiced an interest in supporting her opening a bar when the time was right. When she asked, they didn’t hesitate.
She is all too aware, though, that having investors who love what you do and understand your decision-making isn’t a given. “Honestly, I think we were very lucky at Happy Accidents and got the ideal scenario: regulars who loved what we do and wanted to see us succeed, wanted to support community growth and be a part of something they could enjoy,” Gerwin says.
“They’ve never expressed a sense of control over any of our operations nor questioned any of our decisions.”
Transparent communication about business viability is crucial, says Boulton – especially when explaining to investors the numerous financial challenges of opening a bar (slim profit margins, unforeseen circumstances and staff retention, to name a few). As an operator, he points out, depending on your agreement and the expectations of your investors, sometimes you might have to be flexible on how you run certain parts of your business.
It’s a symbiotic relationship that Gerwin and Montana have finessed over time. “Our investors have no legal ownership or control of the business whatsoever,” says Gerwin. “They simply get a return on their investment from profits. It’s a hard sell, for sure, but the right people are out there and if we start the change, then others will have to follow, I hope.”
While owners and investors need to have a clear understanding of how a business can operate cohesively and amicably, it’s important that bartenders are given the correct information to understand the environment in which they’re entrusting their time and skills.
“Understanding the business structure is essential,” says Boulton. “I’ve worked in bars where the ‘owner’ was a mere manager in disguise.” Gerwin agrees: “Bartenders should be as aware as agreements allow. I think bartenders need to be forthcoming about their goals and objectives with a company.
“If they’re looking for long-time employment and growth, they should know with whom they’re investing their time and career.”
