Et Tu, Brute?
So the story goes… on March 15 (the Ides of March), 44 BC, the historic Caesar was attacked by a group of senators, including Brutus, who was Caesar’s friend and protégé. Grabbed this from Wikipedia not surprisingly. When I think of betrayal, I always remember “et tu, brute?” I bet many of you do, too. The story that follows is about leading with trust, broken trust, and continuing to lead with trust regardless. Names of companies and individuals have been changed as appropriate and any likeness to said names is purely coincidental.
A few weeks ago one of Boloco’s long-time and most beloved (me included) competitors, Anna’s Taqueria, opened a couple of blocks from the Boloco at Children’s Hospital. The launch of a direct competitor within a stone’s throw of one of our restaurants has never been a reason to celebrate. But in the world of business, nothing smarts more than betrayal by those you once trusted. And in a strange series of twists and turns this opening represents perhaps the worst betrayal I’ve experienced since starting Boloco over 25 years ago.
After expending the first round of the PPP funds in mid-2020 , we had to say goodbye to our entire Boloco support team that wasn’t directly involved in restaurant operations. We also were in the midst of losing the leases at 2 of our restaurants, and with Covid still dominating our global affairs, we had set the last day of operation for our Massachusetts locations as August 28, 2020. We saw no path forward in the early summer months of 2020.
When our bankruptcy attorney gave us the unexpected advice to keep going a few days before that late August deadline, we were lean enough to make ends meet until the second round of PPP came our way – which was looking more and more likely each day. But we had no support team to oversee the operations of our 7 remaining restaurants. I needed help.
Enter a 3rd party group – I’ll call it StradaLumina – whose leader – lets call them Tonia – I have known for over 2 decades and who I “trust implicitly”, as I so often shared with the Boloco team and others. As Covid set in took its toll on restaurants, StradaLumina pivoted its original real estate consulting business and set up an interesting and I thought impressive business model where they took over the entire operations of small to medium sized restaurant chains – for a fee. When I asked if they would consider operating Boloco since we were short, well, an entire support team and I had no desire to be CEO or manager of a restaurant company again (a publicly stated wish list item since around 2011), they jumped at the chance. The fees seemed fair, especially knowing more PPP funds were forthcoming to help us weather the ongoing pandemic, and most importantly this would give me a chance to focus on my other priorities – the nascent 211vc investing platform, Worthee (which ended up staying in hibernation), not to mention family and my own health and well-being.
A few months in, with things progressing reasonably well “under new management”, I shared my “big idea” once again. I say once again because this was an idea I had envisioned and pursued at least twice since repurchasing Boloco back in 2015. It goes like this:
- Make an offer to Anna’s Taqueria to buy the brand and take over the leases
- Raise the money from Private Equity and partners to complete the acquisition ($20-30M I had estimated would make it happen)
- Refine and update the operating systems so Anna’s is scalable and able to be franchised
- Rebrand and renovate all Boloco locations to Anna’s – combining their indisputably popular recipes and a cult-certified following by a generation – maybe two – of Bostonians (of which a great percentage have now scattered across the country and even the world) with Boloco’s people-first culture of generosity and kindness with an eye on helping people working in restaurants create clear paths to better lives and futures, often outside of the restaurant industry. Anna’s outsized sales could fund the purpose that Boloco struggled to these past few years.
Tonia was in – the first step, they shared, was to bring Anna’s in as a StradaLumina client, which given the “implicit trust” thing I mentioned earlier was no problem.
I made the introduction to Anna’s sole owner who is also the wife of the former co-owner who tragically passed away in 2019. Mike and I had known each other as friendly competitors since 1998. I wrote a little about our relationship here after I learned he had so suddenly left us.
Anna’s and StradaLumina were soon in bed together… but the idea of buying Anna’s had been put on the back burner. They weren’t interested at this time – or likely at any time, I learned – but Strada had a new client who also happened to be one of my top competitors. Still I was more than fine with it. I was even happy for Tonia and their company.
As 2021 passed, I became more and more ready to move on from restaurants. With the encouragement of my top managers, after heartfelt and open conversations about my inability – or unwillingness? – to provide what they needed, I agreed to sell Boloco to Strada. The deal was nothing to write home about, especially as Omicron was starting to dominate the news, but it was fair and I was at peace. 25 years… I wouldn’t quite make it, I realized. It would be 24 years and 10 months if we closed as planned on December 31, 2021.
At about 2pm on New Year’s Eve, Tonia called me up and respectfully passed on the deal. I felt a slight tinge of disappointment but completely understood. Omicron was in full force, we had not received the RRF money after months of appealing to Senators and Congresspeople personally, and the outlook was less than bleak. I hung up the phone and let my wife Maggie know, and we carried on with our short vacation down in Florida.
A few months later I asked Tonia where they stood on acquiring Boloco and/or putting everything together with Anna’s. Nothing of interest. In fact, a cash infusion was going to be needed, they said, to keep Boloco going. Cash I didn’t have and cash they weren’t prepared to infuse under current ownership structure. We were looking into the abyss yet again. Some days later, Strada offered to simply take Boloco “off my hands”… assume the debt and liabilities and take over ongoing negotiations with landlords, which weren’t insignificant at that stage.
“What would you do with it once you took over?” I asked.
“Probably operate them as profitably as possible and sell the leases to try to make money,” was the response. It was always about making money, it always had been. Nothing wrong with that, but that’s all it was about. Nothing less, nothing more. Plus, this was someone who had previously made money – a large sum – by selling a company I had helped them build from the outset. That company was now failing, more spectacularly than Boloco even, but Tonia was safely out, as was I thankfully, at an awe-inspiring financial return – this largely influencing my “implicit trust” mentioned multiple times previously.
After a few days of consideration, I couldn’t do it. I wasn’t going to just give Boloco away and have its long legacy, if such a thing even existed I wondered, destroyed in months. If I was going to land my aircraft – Boloco – in the Hudson as Sully did with the USAir flight, I had to stay at the controls and do it my way. With less than 2 years left on most of the leases, I wouldn’t be able to keep going for long, but I would take the risk of ending things on my terms – in a way that I felt upheld the integrity I had always hoped we were known for (it turns out very few people know or care about any of what we do under the hood, but I decided if nothing else to do it for myself, my family, and those few people who knew and cared… still very much worth it in my mind).
StradaLumina and Boloco parted ways at the end of April 2022. We couldn’t afford their support any longer. It was a harsh retaking – accounting and bookkeeping had been neglected and the books had to be fully reconstructed over the balance of 2022, logins and passwords were strewn about randomly, new liabilities, expensive partnerships, reporting requirements and delinquencies hit us with regularity… really the only “asset” we had to show for the prior 16 months was a shit ton of Instagram and Facebook food shots that got more than 20 likes only when we boosted them at a handsome profit for technology companies that needed no additional profit. It was a painful reentry into the day-to-day oversight and management of an ailing restaurant business. We had spent well over $200,000 with Strada only to put ourselves in a worse position than we had been in prior to bringing them in. In order to ensure we were ok, only days before the window to receive Covid-era loans closed, I was able to borrow $350,000 from the SBA’s EIDL (Emergency Disaster Loan program) which I am technically responsible for personally repaying over the next 30 years. I was 52 years of age in April of 2022, meaning I’d have this debt hanging over me for essentially the rest of my life (if I’m lucky) but it felt worth that investment to land this thing with heads held high and positive stories to tell. We weren’t going to fail – no, we were going to retire. Yes, retire. A word I had never understood but all of a sudden sounded just fabulous. Run the leases to the end, make every day count in the meantime, focus on our mission and purpose, and be grateful for what would be nearly 27 years in business.
Not even 2 weeks after Strada and Boloco separated, Tonia wanted to talk.
“Anna’s is going to take over the lease where EstaBueno used to be near the Boloco at Children’s Hospital,” they told me matter of factly. This was one long city block away from our best and only profitable Boloco restaurant at that time. I was careful with the words I used in responding, as well as my tone. I’ve learned the hard way – including with this individual – that letting any emotions loose in tense moments such as this often has the opposite effect than intended.
“You don’t even want to be in the business!!!” they exclaimed defensively after my soft-ish response still must have struck a few nerves. I said at least two more times, in the calmest voice I could muster “I just don’t think you should do it. Like, literally, just don’t do it.” I don’t remember how the conversation ended, but it did end.
In the days and weeks that followed, I used all of my tools to let the whole situation go. Here was a distraction and potential pain point that I had actually brought to life myself – trust being the key component in doing so – and it now would be the thing that might be the difference between retiring Boloco on my terms versus having to file for bankruptcy protection in the near future – in my mind the latter being the most clear indicator of abject failure (yes, yes, I know, Donald Trump and many other far more reputable business people have used it wisely as a winning strategy over the years – this just wasn’t something I felt could do).
I did let it go. As did my team when they learned what was transpiring. To say we all felt betrayed was an understatement… to say we were able to breathe through the betrayal was also an understatement. We focused on us. Which was the only thing we could control.
So a few weeks ago I watched the articles and posts announcing Anna’s newest location. I even drove by once to see a decent line and full dining room of happy people in Anna’s – ironically next door to a relatively dead Sweetgreen. The nearby Boloco wasn’t super busy that day either – a few people seated and 2 people in line, but I was at peace with it yet again.
I’m mostly sad about this reminder that trust isn’t something you can “give” to people and necessarily have it returned in kind. People are so often out for their own benefit – even if it means knowingly and sometimes intentionally hurting others – even those previously close to them – in the process. I’m naive to even be writing this – I know all of this is so obvious to most. Despite overwhelming proof for more than 25 years that trust doesn’t always yield better results, I continue to find that, for me, leading with trust (versus skepticism) is so much more fun and fulfilling during the journey itself. Even if the journey winds up in a cataclysmic crash of some kind, as this relationship did, it hasn’t stopped me from trusting until that trust is broken – versus the more common “don’t trust anyone until trust is earned.”
By the way, so far the Boloco at Children’s Hospital hasn’t lost any sales. That may change in the coming weeks as more people give Anna’s a try and make the switch (we can’t win everyone over, neither can anyone) but perhaps Karma will play a role in the long-term outcome here. For the record, I hold no ill will against Anna’s, its owner, or even Tonia and StradaLumina. For most people, business is business. And despite this setback, among others like it over so many years, I will still lead with trust until that trust is intentionally broken – in some cases multiple times. In this situation that has clearly happened – luckily there are a few billion other human beings in the world and ample opportunity to let trust lead interesting and meaningful journeys in business and in life.