Pappas crab cakes in Baltimore sold to technology firm, 1 year after founder died
Pappas Seafood Co. -- a longtime Baltimore restaurant popular for its crab cakes that has even been endorsed by celebrities including Oprah -- has a new owner.
The restaurant was recently sold to a financial technology firm called Teamshares, the general manager of Pappas, Justin Windle, confirmed to CBS News Baltimore in an email.
The opportunity came about about a year ago at a time when employees started to think about retirement benefits after the passing of former owner, Mark Pappas, Windle said. "The idea is to take the business from the retiring owner to turn it over to the employees who work hard for the company," he added.
The purchase will merge the management for all locations and employees will now receive health benefits and a 401k plan that were not possible under "a small, family-owned business," Windle said.
Who bought Pappas?
Teamshares is a publicly-traded firm headquartered in New York City that buys small businesses with the goal to shifting ownership to employees, according to our media partner, The Baltimore Banner.
Founded seven years ago, the Teamshares business model involves the purchase companies to give employees in the company a 10% stake, the company's chief operating officer, Madhuri Kommareddi, told the Banner.
"The profits of the business basically buy down the Teamshares stock and increase the employee stock," said Kommareddi.
The firm hopes every business it acquires will be 80% employee-owned within 20 years, but it depends on the specific company and its profitability, Kommareddi added.
It was the first business venture for Teamshares in the Baltimore area, according to the Banner.
Why Pappas?
The seafood company sold nearly one year after Pappas founder Mark Pappas passed away.
Mark Pappas started his first restaurant in Parkville in 1972 and for 50 years, the seafood company has expanded to include five different locations.
The company is currently run by Steve Pappas, Mark Pappas's son, who wants to find someone to run the company when he retires, since his own children have shown no interest in continuing the restaurant.
"I didn't want them to be in the restaurant business anyway," Pappas told the Banner. "You need a strong financial backing to survive the ups and downs."
What's next for the Baltimore staple?
Teamshares says it will place a new president in charge at the restaurant and look for ways to grow profits. The firm hopes to improve consistency for all five restaurant locations.
"They have different French fries in each restaurant," said Eric Braunstein, the industry lead for food and beverage.
The restaurant also hopes that Teamshares can expand their business on third-party food platforms such as UberEats.
Pappas wants their customers to know that they will not notice a difference when they walk in the door. "People need to know that nothing is changing at all," he said.
Except the crab cakes. The price of the crab cakes can get higher due to market conditions, Pappas said.