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Zachary’s Staff Inherits Ownership

Tuesday July 22, 2003

Friday will likely be business as usual, said J.P. LaRussa, general manager at Zachary’s Chicago Pizza. 

If history is any guide, that means the weekend crowds will be overflowing, the staff will be almost impossibly busy and the restaurant’s legendary pizza, which has won just about every “Best of” award in the Bay Area, will be bubbling. 

But it will be a special day for Zachary’s—exactly 20 years after the husband-and-wife team of Zach Zachowski and Barbara Gabel opened a small pizza place in the Rockridge section of Oakland, just over the Berkeley line. 

“Maybe we’ll jump up and down every once in a while,” said LaRussa, with a chuckle. 

Zachowski and Gabel, who moved to the East Bay from Chicago 20 years ago, say they’ve had a great time in the pizza business. 

“It’s been a hell of a ride and a lot of fun,” said Zachowski, 53. 

But now the couple is ready to retire—and they’re doing it a little differently than the typical business owners. Rather than sell the business to an individual owner, Zachowski and Gabel are turning over the company—which includes both the Rockridge restaurant and a Solano Avenue location in Berkeley—to their 110 employees. 

The owners, who offer higher-than-average pay and benefits for restaurant staff and pride themselves on a family-like atmosphere, said they want to protect what they’ve built. 

“It’s very doubtful we’d find someone who would maintain the culture we have here,” said Gabel. “It wouldn’t feel right to sell it to someone who might take it into the ground.” 

The employee stock ownership plan (ESOP) is open to anyone who works at least 1,000 hours per year, which amounts to about 20 hours per week. Employees will receive company stock equal to 25 percent of their salaries—with the program fully vesting in seven years. 

That means employees who make $40,000 annually will get $10,000 per year in stock. Employees will keep accumulating stock until ownership is fully transferred to the workers—a process that is expected to take several years. Workers will get the stock on top of their regular pay, health insurance and a retirement plans. 

“It seems like it’s going to be a really good deal,” said Nathan Morse, who describes himself as a server, host and seater at the restaurant. 

Morse, who has worked at Zachary’s for three and a half years, said he loves his job. 

“Coming to work is like having fun—it’s like hanging out with your friends,” said Morse. “Now I’m definitely not leaving.” 

LaRussa, who has worked for Zachary’s since it opened, said he anticipates some growing pains as Zachowski and Gabel ease their way out of the business over the course of the next few years. But he said over the last two decades the owners have gradually shifted control of the company to a team of 14 managers, preparing the group to take over. 

“We’ve gone from a company that is run day to day, every minute detail, by the owners 20 years ago and today it’s run by the managers,” said LaRussa. “I think that will help the ESOP process.” 

Zachowski said staffers have told him they are nervous about failing once they take over the business. But he said he’s confident that the restaurant will be around for years to come. 

“We have a lot of faith in our crew,” he said. 

One thing the employees will have going for them is a track record of success. Gabel said the business did well from the start, prompting rapid expansion of the Oakland restaurant and a decision to open the Berkeley Zachary’s in September 1984, just a year after the couple set up shop in Rockridge. 

Gabel said the couple kept it simple from the start, focusing on the restaurant’s signature stuffed pizza and a thin crust version. 

“A lot of restaurants try to do too many things,” she said. “We just wanted to focus on one thing.” 

Gabel said the owners plan to retain a small stake in the company and remain active in the transition for as long as it takes. 

“They’re not getting rid of us yet,” she said, with a laugh. “It’s very important to us that this company stay strong.” 

Thinley Wangchuk, a Tibetan immigrant who has worked at Zachary’s for 11 years, serving as a manager for the last three, said the owners have built a company worth preserving. 

“They not only are for the business, they care for all the employees,” he said. “They treat us like family.”