Behind the Corporation Buying Up Portland’s Most Famous ‘Independent’ Restaurants

On March 13, the Portland-based Instagram account @northwest_mcm_wholesale posted a carousel of memes, one filled with the logos of notable Portland restaurants and cafes: Bamboo Sushi, Barista, Sizzle Pie, Cicoria. In big red block letters overlaying these logos, text reads, “All your heroes are dead and your enemies are in control.” The post currently has over 38,000 likes and 550 comments, with a caption that reads, “Corporate owned fake small businesses in neighborhoods that the original owners helped gentrify.” Another meme in the post shows arrows connecting the company logos of Pizza Hut to Sizzle Pie and Hilton to Ace Hotel. The post was in reference to Sortis, the holding company that has acquired a wide swath of Portland-based businesses.

Part of the alarm around Sortis’s acquisitions is the speed at which they took place in the wake of the pandemic and its devastating impacts on the industry. In the span of three years, the company has acquired 20 Northwest businesses: Its purchase of hospitality group Submarine Hospitality netted it the restaurants Ava Gene’s, Tusk, Cicoria, and the Woodsman Tavern (now closed); it also bought the cafes See See Motor Coffee Co., Water Avenue Coffee, Coffee Business, Mr. West, and Spoken Moto. Add to that the aforementioned small chains Bamboo, Barista, and Sizzle Pie, plus two barber shops and six hotels.

The memes are gaining attention as many independent restaurants in the Pacific Northwest close and others change ownership — some swallowed into Sortis’s maw. The post, and the many strong and outspoken responses it elicited, draws on the deeply rooted anxieties that have been plaguing the Pacific Northwest for years: How do small-scale, local businesses survive — and stay independent — in the face of hardship? Can you corporatize a restaurant without losing its soul?

Portland has been corporatizing, consolidating, and “chain-ifying” for a long time: Consider Chefstable, a restaurant group with more than 20 restaurants under its belt, or Lightning Bar Collective, a smaller group that owns a handful of bars across Portland. Local restaurants Little Big Burger and Sizzle Pie all operate several locations across multiple states, as does Salt & Straw, which is now operating locations in Disney Parks. For a city that prides itself on its broad collection of independent, local businesses, changes to the food and beverage industry like these create tension and elicit conversation among both restaurant workers and diners.

In 2021, Sortis Holdings transitioned into a hospitality group, selling its fund management business to Sortis, LLC, a separate entity owned by former Sortis Holdings managers. Sortis Holdings is run by Paul Brenneke, a commercial real estate developer and entrepreneur. Throughout his career, Brenneke has partnered with private investment firms like Starwood Capital to get Amazon into the downtown Seattle Macy’s building, and during the pandemic established the Sortis Rescue Fund, a fund “designed to capitalize on the dislocation and situational distress caused by COVID-19,” according to its website. The fund took a co-investment from Bain Capital, co-founded by Mitt Romney.

Sortis started buying Pacific Northwestern businesses in 2020, acquiring Rudy’s Barbershop and Bamboo Sushi with the goal of revitalizing them amid the pandemic. Most of the brands are fully owned by Sortis, and the deals were struck through a stock exchange, in which the restaurants’ founders took stock in the holding company in exchange for their company, according to Sortis co-founder Adam Shearer, who provided a written statement to Eater Portland in August 2023. He says Sortis has created 1,000 jobs since its inception. “We share a name with Sortis Capital because they provided the entity and seed capital for our founder group to quickly come together, with shared resources, to bring our brands back to life post pandemic,” Shearer writes. “During the most trying time our industry has ever seen, their contributions were both courageous and essential.”

Beyond Brenneke, Sortis’s leadership is made up of branding and marketing professionals, entrepreneurs, and financial advisors, some of whom were involved with the original brands Sortis purchased. The leadership team has experience at corporations ranging in size from Nike and Starbucks to smaller hospitality brands like the Hoxton. Notably, Joshua McFadden, the former owner and chef at now Sortis-owned restaurants Ava Gene’s and Tusk, is on the Sortis leadership board. In 2020, McFadden was accused of abusive behavior by former employees who took to Instagram with stories of his alleged racist, transphobic, and misogynistic conduct; others reported his hostile and aggressive management style to Eater. He responded to accusations via Instagram. Ava Gene’s only recently reopened since the start of the pandemic, on March 17, 2023.

Across the industry, restaurant owners and workers are searching for solutions to the variety of issues threatening hospitality businesses right now — growing inflation, staffing shortages, and unreliable business among them. At its best, corporatizing smaller businesses has some positives: Corporations and holding companies typically have the money and resources to spend on HR programs and benefits for employees. But while increasing cash flow and implementing structural changes to a small chain or business may suggest that a holding company can support the interests of its workers, whether it does in practice remains unclear.

Sav Ekstrom worked at Tusk, a Mediterranean restaurant, from October 2022 until June 2023. Ekstrom found that the benefits offered at Tusk under Sortis ownership were unmatched: Paid time off is accrued regardless of full-time or part-time status, along with a company match 401(k); all full-time employees, or those working more than 30 hours per week, are offered nine paid holidays and comprehensive health insurance. Ekstrom was particularly happy to get vision and dental through Sortis’s insurance plan — a first for them in the food and beverage industry. The other restaurants under Sortis are said to have similar benefits, and the company is hoping to make benefits uniform across restaurants soon, according to Brookes Decker, director of operations at Submarine Hospitality.

Still, Ekstrom did express some minor frustrations about the bureaucracy of working for a corporation — how long it would take for certain small fixes to be addressed, for example. “Moving into a more corporate space in the Portland restaurant scene isn’t something that I necessarily want to see,” they say. “There could be ways that we could better support our small business owners.”

Sam Smith, a former chef at Tusk and current chef consultant, agrees. His most obvious concern about corporate restaurants — including places like Shake Shack that just opened across the street from Powell’s Books — is that they could take customers away from small businesses that are already struggling. Smith declined to comment on Sortis specifically.

Corporations can put out more products for less money via economies of scale, while small businesses don’t have the same funding, large staff sizes, or physical space to pull off the same feat. “It’s easy to undercut already existing businesses that are struggling with the constant rising cost of goods,” Smith says.

For many restaurant workers, the corporatization of the local restaurant market is a much starker signal of the industry’s future, where restaurants begin to lose their individual character. It’s a concern that Kourtney Paranteau, a long-time service industry worker, has after working for a business that closed under Sortis ownership. In 2014, long before the Sortis buyout, Paranteau worked at the Woodsman Tavern, a Northwest-inspired restaurant within Submarine Hospitality; Sortis acquired the restaurant in May 2022, which later closed in August 2023. “My fear is that Portland is just going to look like the Portland airport,” Paranteau, who currently works at Korean restaurant Han Oak, says. “It [feels] almost like a dystopian movie, where it’s ‘Ava Gene’s, Brought to You by Chase Bank,’ or something. I grew up here, and everything has been branded within an inch of its life now, and I think that’s a little sad.”

But even beyond the potential loss of a restaurant’s identity in corporatization, some workers are worried about the way corporatized restaurants continue to be marketed as independently owned businesses. Smith sees the lack of transparency in these larger-scale restaurant groups as a particularly insidious factor, and one that impacts smaller businesses with less funding around the city. Take, for example, the Oregon beer industry: 10 Barrel, one of the breweries often associated with the state’s craft beer scene, was purchased by large-scale domestic distributor Anheuser-Busch in 2014 (cannabis lifestyle company Tilray is currently finalizing its purchase of 10 Barrel from Anheuser-Busch). In an arguably oversaturated craft beer market, 10 Barrel’s reputation as an “Oregon craft brewery” puts it in competition with the state’s smaller-scale, independently owned breweries operating with less capital — in other words, when those breweries lose out on a sale, they are more likely to feel it than 10 Barrel would, because it has the financial cushion of a large-scale beer distribution machine.

Luke Dirks, co-founder of Submarine Hospitality and current director of wholesale at Coava Coffee, feels that while the generic corporate model provides some of the structural and financial support many smaller-scale businesses don’t have, it loses the human-level connection that comes from owners working the line alongside their employees. “I feel like for the most part, you end up in a situation where it becomes all about the transaction,” he says. “Who you’re working for becomes kind of a faceless entity.” Dirks declined to comment on Sortis for this story.

A “faceless entity” is exactly how bartender Brian Gonzales describes Sortis. Gonzales didn’t know much about Tusk before he started working there; he was drawn to the restaurant for the health insurance and other benefits advertised by his friend and former coworker who suggested he apply. But he was quickly turned off by the restaurant’s business model and culture, which he describes as “corporate.”

Gonzales left Tusk earlier this year, after about six months working there. “I was just a cog in this machine,” Gonzales says. “I left and it was like, ‘Okay, we broke that piece of the machinery because we overworked and didn’t pay it enough attention, so let’s just get a new one.’”

He says that he and most of his coworkers opted out of the company’s insurance because the cost of enrollment was too high. And when it came to human resources, Gonzales didn’t trust that the organization’s department was working to protect workers’ interests or well-being. “Usually when HR is prevalent in a business, I feel like everyone is dotting the I’s and crossing their T’s,” he says. “Like they don’t want to get fucked over or do something wrong.”

Gonzales started at South American restaurant and cocktail bar Cereus shortly after quitting Tusk. He loves his new job, and when asked what makes it more fulfilling, he says, “Well, for one, I know who the owner is. I work with the owner. He’s on shift, [and] I fucking love that.”

The close-knit independent business model is appealing in certain ways. Gonzales says he’s more willing to work hard at a restaurant in which he knows the owner, understands their vision, and wants to see that vision flourish.

The narrative that a restaurant staff is a “family” is both pervasive and mythic in the food industry — workers are often encouraged to feel that their coworkers and employer are invested in their personal success and well-being. But owners have a bigger stake in the restaurant’s success, more power than their employees, and talking to them about issues within the restaurant can be daunting. When professional dynamics get muddied, there’s more potential for manipulation and inappropriate behavior. This dynamic is, in part, to blame for some of the abusive and inappropriate behavior that many chefs, managers, and restaurant groups were under fire for three summers ago. In response, several current and former restaurant workers have spoken up about their discomfort with the “family” narrative.

Decker says that Sortis has made a deliberate effort to establish healthy relationships between employees and upper management. Within the year following the accusations made against Submarine and Joshua McFadden, Submarine attempted to address issues within the restaurants with outside help: The group worked with Apron Equity, a consulting firm dedicated to equity and inclusion within the hospitality industry. After Sortis acquired Submarine, it bolstered the company’s HR department; now, Decker himself is present in at least one of the restaurants every day.

Sortis is working to keep the various brands it has acquired true to their original identity or concept, Decker adds. He says they have no interest in creating “cookie-cutter” branding — each restaurant has its own team; many include at least one person who has been there since opening. “No one is up-on-high dictating to me how they want Submarine Hospitality to run,” he says.

Some of the businesses that have been acquired by Sortis were essentially bought out of bankruptcy — particularly since the fallout due to COVID-19 — including Rudy’s Barbershop and Bamboo Sushi. Bamboo itself has a drama-filled past — in 2020, the chain was caught in a legal battle between its founder and private equity firm Bain Capital, once called “the worst of capitalism” by Rolling Stone.

The list of closed restaurants keeps growing, and barriers to entry are getting higher for family- or independently owned restaurants. And when restaurant owners add the challenge of creating a more equitable space — one that doesn’t rely on underpaying farmworkers, line cooks, servers — staying afloat becomes even harder. Some within the Portland restaurant world have attempted to opt out of the toxic trappings of the field by creating cooperatives and restaurant collectives, but those alternative business models are still exceptions to the norm — and not all have survived. “People are sick of everything costing more, but ultimately, restaurants probably need to cost more,” Dirks says. “Because if a restaurant can’t pay people properly and we start adding all these surcharges on, that starts to feel like your fundamental business is broken.”

“I think the restaurant industry is searching for a new model,” Dirks says. “But also for employees to feel like they’re engaging in a fair and equitable structure. And that’s the million-dollar question right now.”

The Sortis buyouts, among other steps toward corporatization across the Pacific Northwest, feels pronounced not just because of the state of the Portland dining scene right now — grappling with the impacts of the pandemic, inflation, and reckonings within the restaurant industry — but also its history. Portland has a strong cultural legacy of independently owned, personalized restaurants with clear and cultivated points of view. It’s part of the mythos of the city’s restaurant world: Big-city chef exhausted by the grueling norms of the industry escapes to Portland to open a food cart, or to serve pizza in a shop furnished with inherited mismatched chairs, or to pop up around town cooking food inspired by family recipes. Chefs from New York and San Francisco pack up their knives in pursuit of a promised land of work-life balance and of creating a business that is not only sustainable, but equitable for its employees.

But in talking to so many in the city’s restaurant industry today, that narrative falls apart. Those business owners have their own share of problems — they run out of money, or can’t keep their promises to their staff. They close, or make concessions. Large corporations are typically more focused on profits and shareholders than on the well-being of workers, but with Sortis’s still-brief track record, only time will tell. As Sortis likely expands, and similar companies crop up, there will only be a stronger need to keep an eye on the use of consumer money, corporate business practices, and treatment of staff.

But whether Sortis in and of itself is successful — and whether it lives up to its intentions — is just a sliver of the story. What does it mean for Portland’s restaurant workers if the only way to save the industry is by creating restaurant group monopolies? Does that actually mean that we’ve saved the industry at all?