LACONIA — When Reuben Bassett, along with his cousin Aaron, were starting Burrito Me in Laconia nine years ago, Greg Packard was working right there with them, helping with everything from renovating the space to figuring out how to make dozens of burritos to order for hungry lunch crowds every day.
Seven years ago Bassett hired Sarah Hancock to work at the then-new Plymouth store. Hancock was able to translate the Burrito Me model to a much different market, and as she did, fine-tuned the operation in a way that improved efficiency in Plymouth and back in Laconia.
Hancock and Packard have been managers of their respective stores for several years, and now, they can say they’re owners, too. Bassett decided that he didn’t want to find out what it would mean to run the business without them, so he has taken an increasingly common measure to keep them around – he has given them an ownership stake in the burrito business.
Over the past year, Bassett – Aaron is no longer involved in the business – has given Hancock and Packard a three percent share of the company. They’ll get another three percent if they stick around for another year, and if they stay for two more years, they’ll each own a tenth of company.
“They are an integral part of what we do,” said Bassett, who now focuses his energy on commercial real estate. “They’ve worked me out of a job, which is what I wanted, but they’re necessary.”
He said he decided to make them managing partners as an “incentive for the future, thank-you for the past.”
Packard was studying sports management and business at NHTI, and working in the kitchen at Saint Anselm College, when he started helping the Bassett cousins give shape to their business idea. Likewise, Hancock was also a college student – she was studying technical theater and tourism at Plymouth State University – when she started working at the Burrito Me store in Plymouth.
“Having ownership is something I always wanted,” Hancock said. Even before becoming vested in the business, she treated it like her own. “The Plymouth store has always been my project, my baby.”
Packard said he has grown along with the business, and his connection to Burrito Me community has become greater than just as an employee. “Creating relationships with other employees and customers, the ownership made sense,” he said.
“It’s hard to find low-level employees, let alone high-level, good employees,” Bassett said. “I want to keep (them) around for as long as we can.”
Making employees owners is not necessarily a new concept, said Scott Stephens, a business advisor with the NH Small Business Development Center.
“It’s pretty common, it’s just a way to add responsibility back to key employees and get them vested in the operation of the business,” Stephens said. “I’ve seen it used in lots of different ways.”
The vesting of employees can be done to make workers more comfortable with taking on additional responsibilities, or as a transition period for an owner who is preparing to divest his or her share of the business.
Karmen Gifford, president of the Lakes Region Chamber of Commerce, said it's a direction that might be increasingly considered by local businesses tired of seeing good workers jump ship.
“It’s definitely a great way for retaining, and it keeps them positive, because they’re vested. So when a location does well, that can inspire those people at that location,” Gifford said. “You’re not going to walk away, it’s worth your time and energy, you think like an owner because you are an owner.”
One of the first local businesses to employ this retention tool was the T-Bones and Cactus Jack’s restaurants, both run by the Great American Restaurants group, founded by Tom Boucher.
Boucher said his company came up with the practice after tweaking a model he borrowed from Outback Steakhouse. That chain entered its veteran managers into a profit-sharing model, and in 2008, Boucher decided to give some important, long-term general managers the chance to use their year-end profit sharing bonus to buy a share of their store.
“It has been a really successful model,” Boucher said. Nearly every manager who has had the option has taken it, he said. And, as the company has opened new stores, those “managing operators” have had the opportunity to invest in the new locations, such as the T-Bones in Concord that is slated to open in January of next year.
“I saw an opportunity to give them a small piece, over time. As the restaurant became more profitable, it gave them a sense of more pride, more skin in the game. It’s really been a great retention tool, and they’re proud to say, ‘I’m part owner of this great company.’”