Another long-running local business changed ownership – putting its future in the hands of employees and setting up a way to benefit workers when they retire.
Bardenay Inc., owned by husband and wife Kevin Settles and Lisa Fraser, sold the company into an employee trust last fall. Commonly referred to as an employee stock ownership plan, or ESOP, Bardenay joins several other local businesses taking this route recently – including Commercial Tire, Tates Rents, and Drake Cooper. Long-standing companies like WinCo Foods and Litehouse Foods also operate under the ESOP model.
Settles notes that while employees will benefit from the trust, the trust actually owns the business – and an independent trustee acts on behalf of the trust. Settles says the nuance is essential due to alcohol licensing in Idaho. Owners of liquors licenses are subjected to background checks and other measures.
“None of the employees will hold a significant percentage of the trust,” he said. “With ESOP, they don’t get a draw. When we do distributions, the money stays within the company. When people leave (or at retirement), they are eligible to withdraw, but it goes through payroll. It’s a retirement plan that comes from the proceeds of the business.”
Plan for the future
Settles says the company has many long-term employees. The first Bardenay Restaurant and Distillery opened on Boise’s Basque Block in 1999. In the years since the company added locations in Eagle and Coeur d’Alene and branched out with a new brand – Coyne’s in Eagle in 2021.
The ESOP model allows Settles, 63, and his wife the ability to plan for the future as they move toward retirement.
“We had two goals. One was to leave a company that is happy, healthy, and ready to grow. And B to help longtime employees with their retirements.”
As Settles worked through issues with the state related to the licensing, he’s just started fully rolling out the changes to employees.
“We are getting to the point where we are talking about it, and they are getting excited. It will be next year before we have the full package formed.”
While the last two years have been complicated for anyone in the restaurant business, Settles said the impacts of the COVID-19 pandemic didn’t spur the change.
“I did not do the trust because I had COVID fatigue,” he said. “Far from it, I really liked owning four restaurants and three distilleries and had to force myself to finish the deal. I did it because I think, if it is managed properly, the trust will be best for the company.”
He said many of his core team members are interested in growing the company further.
“They’ve enjoyed the process of being with me through Coyne’s opening up,” he said. “We spent a lot of time and money and looked at what our next opportunity would be. We have two brands that have legs and can grow. We are comfortable with what Coynes can do.”
Each restaurant includes an in-house distillery facility, cranking out rum, whiskey, vodka, gin, liqueur, and more. Settles said it offers another area of growth.
“We have the distillery side and have been passive with the sales outside of our bars, but we brought on a full-time sales manager last year, and we could at this point and time build a full-time distillery for our brand.”
Settles will remain as CEO and keep working, calling himself a workaholic. But he hopes this will allow for more work-life balance.
“I don’t want to wake up on Saturday and think, ‘what can I do today?’ I want to wake up and think – ‘do I do a little bookkeeping work or go golfing?'”
Ultimately, he hopes this opens up the next chapter for Bardenay and Coynes – and his employees.
“My baby is 22 years old. It’s ready to date. I’m willing to let it date, but I want to chaperone it. I was cautious about making sure the key staff were interested and understood it before we executed it. I’ve always developed the staff that I think can replace me.”