There is hope. A well-known and innovative restaurant-owner who has made a reputation for providing his staff with benefits and compensation beyond the industry norm has now established a $220 million fund to invest in similar-minded businesses. This is the bright side of capitalism—the aspect that will help it survive as intended. Pace, Adam Smith.
PHOTO: RICHARD DREW/ASSOCIATED PRESS
New York restaurateur and Shake Shack founder Danny Meyer has gone into the private-equity business, raising $220 million in a fund that is investing in companies that share his employee-centric focus. . . .
The 59-year-old restaurateur has earned a reputation as a forward-thinker. He launched Union Square Cafe in Manhattan, his signature establishment, in 1985 when the Union Square neighborhood was far from the popular locale it is today. He created the fast-casual Shake Shack burger-focused chain in 2004 before fast-casual was a dining buzzword.
Perhaps key to Mr. Meyer’s reputation, however, has been his emphasis on providing his staff with compensation and benefits beyond the industry norm. To that end, he eliminated tipping at his full-service restaurants, saying he wanted to ensure all his employees, not just waiters, are properly paid.
Now, Mr. Meyer wants to bring those values and his business savvy, along with an infusion of cash, to companies that take a similar approach. That could translate into a new revenue stream for USHG, whose history stretches back more than 30 years. Restaurant-industry insiders say the USHG-led fund could get favorable terms when buying a stake in other companies precisely because the business potentially profits from the mere tie with Mr. Meyer.
“Danny Meyer is a brand,” said Arlene Spiegel, a New York City-based restaurant consultant. . . .
So far, the fund has invested in just a handful of companies, with the focus on the food world. They include Salt & Straw Ice Cream, a West Coast chain with 10 locations that is known for its “imaginative” creations, and Resy Network, a restaurant-booking app that takes a curated approach in helping users find a place to eat.
Also in the mix: Joe Coffee, a New York chain with 16 stores that does its own roasting and emphasizes its strict sourcing standards when selecting beans. USHG announced the investment previously, though at the time it didn’t indicate the financial commitment was coming through a separate fund.
The fund, Mr. Meyer said, also will look to non-food sectors for future investments, reflecting his belief that “every business is a hospitality one.”
Union Square Cafe in Manhattan