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Bow Truss Coffee Locations Close As Employees Stay Home: Report

By Ariel Cheung | January 12, 2017 12:10pm | Updated on January 12, 2017 12:38pm
 Interior at Bow Truss, 1641 W. 18th St.
Interior at Bow Truss, 1641 W. 18th St.
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DNAinfo/Chloe Riley

LAKEVIEW — Employees of all 10 Chicago Bow Truss locations didn't come to work Thursday, forcing the coffee shops to remain closed.

Paychecks have been bouncing for months, while vendors have seized equipment from several stores due to nonpayment, one employee said.

Some are still owed as much as $1,000, said employee Krystal Smith, 29.

"We love our customers and staff so much, we're super tight-knit, but we can't take [CEO Phil Tadros] anymore," she said. "We decided to send the message that we're not going to work for free any more and hang in there and hope that what he tells us will be true."

The workers were not paid last week and refused to come to work as a result, as first reported by Crain's Chicago Business. Bow Truss is "taking a time out until things are refocused and on track," CEO Phil Tadros said Thursday morning.

The upheaval comes as negotiations between Tadros and business mogul Marcus Lemonis disintegrate over the purchase of the company, with Lemonis saying Thursday that he doesn't see a viable path to making the deal happen.

In December, Lemonis was poised to buy a 90 percent stake in Bow Truss for "several million dollars," he said.

But the deal went sour earlier this week, as Lemonis told Crain's he had uncovered troubling signs of financial mismanagement, including past due rent and a failure to pay employees.

"I learned several things I just didn't like," he told Crain's. "He never told me he had a habit of bouncing paychecks, and he never told me he was collecting insurance premiums out of employees' checks but not remitting their portion or the company's portion to their insurance company."

Lemonis said he felt it was right to give Tadros a chance and not allow his past to taint the negotiations, despite warnings to the contrary from several people.

"I have to base my decisions on my experience," he told DNAinfo. "And my experience has been terrible."

Lemonis said he has "no interest in being partners" with Tadros. He reportedly has until Feb. 28 to decide whether to back out of the deal to take over Bow Truss, but said he doesn't foresee it working out.

"I wouldn't give him a penny," Lemonis said. "As I learned about what he was doing to the employees, I just lost trust in him."

 

 

Tadros said Lemonis "has the means to pay the bills" that Bow Truss owes to turn things around. In the meantime, he's "in talks with several people that [are] look[ing] to help," Tadros said.

He said the employee walk-off was a temporary setback, but employees dispute that the nonpayment was a one-time issue.

"It's so much worse than I think anybody has ever known," said Krystal Smith, who managed the Bow Truss at 900 W. Van Buren.

Smith said her Near West Side was the first to close Wednesday. She and the location's baristas explained the situation to customers, Smith told DNAinfo.

On Wednesday night, Bow Truss partner Darren Marshall offered cash payments to anyone who would show up to work, particularly at the Loop location, 190 S. La Salle St., Smith said.

Emails from Tadros to his employees show his efforts to cover payroll and assurances that he would "fix this" and "give it all I've got to make it right."

"I apologize for my fierce excitement in growing the brand," he said in a Sunday email.

Other emails show payment issues going as far back as October, with Marshall blaming an "arbitrary hold" on bank payments for the bounced checks.

In August, Marshall said he would take over as interim CEO while Tadros took a personal leave, the emails show.

"I want you all to know that the financial health of this company is our #1 primary concern," Marshall wrote. "We've grown very aggressively over the past few years, and while the awareness of our brand and coffee has spread quickly, we need to realign our priorities to ensure we can properly sustain that growth now and in the future."

He added that payroll issues at the time were "completely unacceptable," and said the company would pause on opening new stores to focus on "maintaining appropriate budgets for our existing group of stores."

By Thursday afternoon, Ald. Carlos Ramirez-Rosa (35th) was among those speaking out in support of the Bow Truss employees.

 

 

Downtown Ald. Brendan Reilly (42nd) offered assistance to the employees, as well:

 

 

Tadros accused Lemonis of reneging on a promised $300,000 loan at the last minute on Friday, "not even giving me a working day to get payroll in," he said. If he had known the loan wasn't coming, Tadros said, he would have redirected funds to payroll that were instead used to pay off some loans.

"Now I'm scrambling to take care of them, along with other bills," Tadros said. 

 

 

Tadros denied that Lemonis was left in the dark on Bow Truss debts "that were fully disclosed to him."

"This put the company in a very unfortunate position. It has caused us to have serious chaos and disruption," he said.

Tadros chalked up the nonpayment to an "intentional and calculated" move by Lemonis.

"He knew this was a way of taking Bow Truss from a team that has put their heart and soul into a product we all love," Tadros said in a statement. "Now we're working endless hours for the timing of incoming money to clear our accounts and scrambling to keep up with the amount recently promised."

But Lemonis said the move was in no way a negotiation tactic.

"Take responsibility for once in your life," Lemonis said of Tadros. "When your employees don't get paid, it's nobody else's fault but your own."

Lemonis said his one regret is that employees at Bow Truss "got stiffed," particularly where their insurance premiums were involved.

"If I knew checks were going to bounce — which he did not tell me — I would have figured something out," Lemonis said. "If I had another business in Chicago, I would have them all come pick up their paychecks."

The employees, Lemonis said, are "the bright spot" in the company.

"As I did due diligence, I found really only one asset that was worth anything: the people that worked there," he said. "You mistreat the employees, and you've crossed the line with me."

As for the employees themselves, most are hoping that Lemonis will still find a way to take control of the company and give Tadros the boot.

"They're all being screwed out of their jobs right now," Smith said. "If Marcus buys the company, I think there's a good chance people would be really excited to come back."

The deal's unraveling is yet another blow for Tadros, who was left reeling after Crain's reporter Peter Frost first detailed the coffee mogul's penchant for leaving a trail of lawsuits, failed businesses and upset investors and vendors in his wake.

Tadros denied the legitimacy of the July report, accusing Frost of "violating a bunch of journalism standards that even a few supermarket tabloids wouldn't touch" in a self-authored Medium post.

In July, Tadros was arrested on a domestic violence charge that was later dropped when the victim did not appear in court.

Partnerships with Iliana Regan and Jared Leonard on two different, short-lived concepts at 2928 N. Broadway fell apart last year, forcing the closures of Bunny, the microbakery, and The Budlong.

The battle over Budlong Hot Chicken has led to another lawsuit, with Tadros accusing Leonard of breaking their operating agreement and claiming Leonard violated a noncompete clause.

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