How did things deteriorate to this point?
It’s hard to separate the fate of the Chicago boutique roaster from that of its owner, Phil Tadros, a self-proclaimed “serial entrepreneur” whose businesses include Aquanaut Brewing Company and the digital marketing firm Doejo. He founded Bow Truss Coffee Roasters in late 2011 and opened 11 locations (10 in Chicago) over the next few years, with plans for six more. The rapid expansion—coupled with a lack of funding, negative press (started by a disgruntled investor, Tadros claims), and the subsequent loss of big wholesale accounts—led to unpaid bills, missed rent, and bounced paychecks.
Reality TV star Marcus Lemonis could have bailed Bow Truss out. How did that go sour?
Lemonis, who hosts CNBC’s The Profit as a vehicle to invest in struggling small businesses in exchange for ownership stakes, pulled out of a deal to buy the coffee chain early this year. Tadros tells Chicago that Lemonis left Bow Truss hanging, holding hostage an infusion of badly needed cash while trying to change the terms of the deal at the last minute.
How did their spat escalate?
In February, Tadros filed a $26 million lawsuit accusing Lemonis of fraud. Two weeks later, Lemonis countersued, claiming that Tadros lied about the company’s finances and failed to disclose upfront the extent of its debts and payroll problems. He seeks dismissal of Tadros’s suit and repayment of nearly $100,000 that he lent Bow Truss (plus interest and damages). Neither businessman is a stranger to legal tussles. Lemonis has weathered a slew of suits related to onscreen and offscreen deals gone awry, and Tadros has been sued at least 10 other times over the years—all “common business, basic contract stuff,” he says. Another Bow Truss lender and investor also have ongoing lawsuits against Tadros and his company, claiming missed payments.
Why did Bow Truss’s employees walk out?
Bounced paychecks led to an organized work stoppage in January, forcing all the Chicago locations to close; 10 employees then filed a lawsuit against Tadros and the company. Their attorney, Scott Kane Stukel, says Tadros agrees that they weren’t paid on time, but the dispute is over “how deep this rabbit hole goes.” The lawsuit alleges unpaid overtime, withheld tips, and paycheck deductions that never went to insurance premiums and retirement savings. Says Tadros: “If there are things missing, we’ll figure it out together. But no one’s running, lying, hiding; we’re just trying.” Two Bow Truss locations have since reopened, largely staffed by past employees, he says.
Has the situation been blown out of proportion?
The case is a perfect storm: beloved local product, celeb investor, media interest. Still, Tadros is shocked by the hoopla: “People keep forgetting that we’re a small business. I’m being judged for things that I might not have the means to rectify as soon as [I’d like].” He admits to growing Bow Truss too fast without enough funding and partnering with the wrong investors. The staffers’ attorney isn’t buying it: “[If I’m an employee,] I’m not interested in his self-assumed victimhood mantle. I don’t want to work for someone who’s only going to pay me if everything comes up roses on the various gambles they’re making.”
Enough with the drama—where do I get my coffee?
Bow Truss is operating in River North and the Loop. And Tadros still tentatively plans to go forward with two new locations—one by City Hall and another in Lincoln Park.
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