George Webb marks 60th birthday that almost didn't happen
08.05.2008 03:01
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- Source: JS Online
Iconic short-order restaurant chain George Webb is celebrating its 60th birthday this year - but it very nearly didn't make it to that milestone, according to a lawsuit working its way through Milwaukee County Circuit Court. The company that runs 40 counter-stool restaurants in southeastern Wisconsin was in danger of going bankrupt last summer. Things got so bad that a meat supplier demanded cash before turning over a load of bacon, according to court documents. In an effort to head off financial disaster, Philip Anderson, a Whitefish Bay businessman who had lent money for the 2005 purchase of the company, pushed out owner Jayne Aliota and took over day-to-day operations. That move is at the center of the lawsuit: Aliota, of Nashotah, is suing Anderson for damages and attempting to regain control of the business. An arbitration session is scheduled for July 10 in Judge Michael Brennan's court. Neither of the participants in the suit would talk about the situation. Ryan Stamm, director of purchasing for George Webb, said the company's financial situation has improved. "We've begun to turn the corner," said Stamm, who is the son of former owner Dave Stamm. The elder Stamm bought the business from the Webb family in 1985. When he decided to retire in 2005, he sold the company to Aliota, who held a management position. According to court filings, Aliota borrowed $500,000 from Anderson and $2.65 million from M&I Bank for the purchase. Terms of Aliota's agreement with Anderson called for her to be president of the company, running day-to-day operations. Anderson would provide management advice and would share equal responsibility with Aliota as a consultant. By the time Stamm sold to Aliota, the George Webb chain had shrunk from its peak of 50 restaurants in the 1990s. Now there are 40 restaurants, nine of which are owned by the corporation. The rest are owned by franchisees. New look, same clocksAlmost all are in southeastern Wisconsin, and most are now in strip malls, like the corporate-owned restaurant at S. Sunny Slope Road and W. Greenfield Ave. in New Berlin. The crowd at breakfast there on Wednesday was unaware of the court controversy. "I come here three times a day," said Mick Vinchattle, 64, who lives nearby. "I lost my wife five years ago. This has become my family." As he sat at the counter, a waitress greets him by name. Like the television sitcom "Cheers," it seems that everyone there knows everyone's name. Vinchattle started dining at Webb about 10 years ago, and has struck up friendships with a group of about a half dozen men who come there every day. Sometimes the group swells to as many as a dozen, and it has a name: "The Board." "Before that, it was 'Monkey Island,' " Vinchattle said. A waitress made the men change the name because she didn't like it, he said. All of the Webb restaurants now look like the one in New Berlin, with earth-tone dcor and booths that supplement the traditional 13 counter stools, Stamm said. Webb started adding booths in the 1970s. The restaurants still have two clocks, side-by-side, a bit of Webb signature dcor. But they also have televisions hanging near the ceiling, and a "No Loitering" sign. There's a $2 minimum per person and a 20-minute time limit for a visit. That's not strictly enforced, Stamm said, but it's a tool that a waitress can use to get rid of unwanted guests - an occasional problem for a 24-hour operation like Webb. A couple customers at the counter Wednesday were smoking, including a third-shift nurse from Froedtert Hospital who lives in Wauwatosa but drives to New Berlin because she likes that Webb location better than the one near her home. That Wauwatosa Webb is one of five that have gone smoke-free recently, a move that Stamm hopes will bring in more families. The company is thinking about extending the smoking ban. "We're really hoping that the government will pass a ban on smoking statewide," Stamm said. Sales reboundWebb's sales are up this year after dropping in 2007, Stamm said. He attributes some of the improvement to better training for employees. The company posted a loss of $39,000 for the year prior to April 2006, according to a balance sheet on file with the court. In an affidavit, Anderson said the company was delinquent on nearly half of the $800,000 it owed to vendors in August 2007, when he took control of the company. Affidavits from Webb managers on file with the court said Aliota's refusal to raise restaurant prices, despite rising costs for food, was partly to blame. Documents filed on Anderson's behalf also accuse Aliota and her husband, Steve, of using company credit cards for personal expenses. The documents also say Aliota used franchisee money earmarked for advertising to pay salaries and vendors instead. Aliota filed her lawsuit in November. In her deposition in December, Aliota said: "I have been with that company for seven years. I have worked tirelessly to build the company up. When I had the opportunity to purchase it, Phil came in to help me. To be ousted, unceremoniously kicked out, locked out and not given the opportunity to talk to him at all while all of this was going on has put me through hell; my family through hell. And life for Phil just goes on." Aliota is asking the court for an injunction to restore her to her position, back pay and unspecified damages. Anderson argues that there is no emergency that justifies the request for an injunction. While the battle continues in court, the company is hoping that customers will focus on improvements such as new bright red uniforms on Webb's wait staff, and new Wi-Fi service at the restaurants in Peshtigo, Brookfield and on the east side. Next week, to celebrate the 60th anniversary, live radio remote broadcasts with giveaways are planned at locations in South Milwaukee, Hales Corners, Franklin, West Bend and Milwaukee. And there's a big anniversary deal on hamburgers and fries: They'll go for just 60 cents from Monday through Thursday.
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