Baltimore Crab Cake Restaurant Group Changes Ownership
A well-known Baltimore crab cake business has a new owner, but customers should expect the restaurants to keep operating much as they have for years.
The seafood company, which runs a group of crab cake restaurants and a distribution center, has been purchased by a financial technology and investment firm. The purchase price was not made public.
A Family Business Built Over Decades
The restaurant group began when its founder opened the first location in a former bar in Parkville. Since then, the business has grown into five locations and a central distribution facility in Perry Hall.
The Perry Hall facility sends crab cakes and other products to the restaurants. It also ships orders directly to customers. The company became especially well known among Baltimore residents and gained attention from a famous television personality who lived and worked in the area before becoming a national star.
The founder’s son later took over the business. He said managing the company had become increasingly difficult because the restaurants operated as separate corporations, each with its own needs and direction.
Running several restaurants also brought new financial challenges. Rising costs, changes in customer habits and the pressure of keeping each location profitable made the business harder to manage. The owner said he also needed a long-term plan for the company because his children did not want to take over the restaurants.
A New Ownership Model
The new owner buys small businesses and works to move ownership gradually to their employees. Workers receive an initial 10% ownership stake, with the larger goal of giving employees most of the company over time.
The plan is for profits from each business to help reduce the investment firm’s share while increasing the value of employee-held shares. The firm hopes many of the businesses it purchases will eventually become about 80% employee-owned.
That goal depends on each company’s financial performance. Some businesses have made strong progress, but none of the firm’s purchases has reached the full ownership target yet.
The investment firm now owns more than 90 small businesses in several industries. The Baltimore restaurant group is its first purchase in the region. The company also owns another restaurant business, a fast-food chain that began in Nebraska.
Plans for the Restaurant Group
The new owners plan to name a president to manage the restaurant group. They will also review the business and look for ways to improve profits.
One area under review is consistency among the five locations. The restaurants do not always serve the same side dishes or use the same procedures. For example, the type of French fries can differ from one location to another.
The new ownership group may also help the restaurants improve their use of delivery services. A larger company could potentially negotiate better fees with outside ordering platforms because of its broader business presence.
Other changes may include stronger financial planning, clearer management responsibilities and more uniform operations across the restaurants. The goal is to make the business easier to run while protecting the food and service customers already know.
Customers Should See Little Difference
The former owner said the sale is not expected to bring major changes for customers. The restaurants will continue using the same name, and the food, locations and daily experience are expected to remain in place.
He will continue helping with daily operations and advising the new president during the transition. He may remain involved for about two more years before retiring.
Several family members will also stay with the business. One will continue working at the Cranbrook location, while another will remain the general manager of the Perry Hall restaurant.
The former owner will keep ownership of the buildings used by the Perry Hall and Parkville locations. He said he still has a strong personal connection to the company and wants to see it succeed under its new ownership.
A Sale Meant to Reassure the Community
Many businesses purchased by the investment firm do not make a public announcement. In this case, the former owner wanted customers and members of the local community to understand what had happened.
He also wanted to stop rumors and make clear that the restaurants were not closing or being completely changed. The business now has additional financial support behind it, while the people connected to the restaurants remain involved.
The cost of crab cakes, however, may still change. Seafood prices can rise and fall, so customers could see prices increase before they eventually level off or decline.