Buyouts: LACERS Commits to Roark Fund Despite Board Member Concerns: “How and When Are They Planning to Make Change?”
Private equity firm Roark Capital owns a number of fast food chains like Dunkin Donuts, Jimmy John’s, Sonic, Arby’s, and Buffalo Wild Wings. Roark’s portfolio companies and their franchisees employ almost a million workers.
A report last year from the US Government Accounting Office (GAO) found that some of Roark Capital’s chains (such as Sonic, Dunkin’ Donuts, and Arby’s) were among the companies with the most workers relying on food stamps.
Late last month, Los Angeles City Employees Retirement System (LACERS) board member Nilza Serrano expressed concerns about Roark’s treatment of its workers, as the pension fund’s consultant, Aksia, informed the board that it had invested $40 million of LACERS’ money in Roark’s new fund.
Buyouts, June 4, 2021: LACERS commits to Roark fund despite board member concerns
“It is my opinion that human capital is vital to the success of both these investments. If they are not going to be treating their staff in a way that is going to be fruitful, they will leave…and then our portfolio will suffer because of it…” Serrano said at the hearing, referring to testimony from a former worker at Sonic, which is owned by Roark Capital.
Zella Roberts, the former Sonic worker, had earlier testified how carhops were paid below the minimum wage because they were tipped workers, even though customers did not realize this and could not leave a tip when using their debit or credit cards.
In addition, although the workers at Sonic were required to wear masks because of coronavirus, customers were not, putting the worker’s health and safety at risk. Sonic workers created a petition in order to help push Roark to change these conditions in their workplace.
Sonic workers still have not received any response from Roark.
After being told about Roark that “they’re aware of it,” “they’re working on it,” and “They are taking measures to address the issue,” Serrano concluded: “Forty million dollars is a lot of money to an organization that does not value its employees. I will expect staff to give us a report soon on what Roark is planning to do to take care of their employees. You cannot have people working for no money, that’s ridiculous.”