Jeff Jacobsen, son of PDQ Food Stores founder Sam Jacobsen, sold the company for an undisclosed price, the report said.
"He decided to pursue other interests and gave [image-nocss] us the opportunity to buy the company under the ESOP," Troia said. "We're excited about the opportunity."
Troia said the management structure headed by president Jerry Archer will remain the same and not all employees will be immediately eligible for the plan. He said he could not provide further details about how the PDQ Food Stores ESOP will work.
Under a typical ESOP, a company's stock is held in trust and distributed to employees annually in a manner similar to retirement benefits. When employees leave the company, they either receive the cash equivalent of their stock or sell the stock back to the company, Loren Rodgers, a project manager with the National Center for Employee Ownership (NCEO) of Oakland, Calif., told the paper. In most cases, a lender provides the money to buy the company stock although sometimes the sale is financed by the seller, who receives tax benefits when selling to an ESOP.
Three of the nation's five largest employee-owned companies are supermarkets, according to NCEO. The largest is Publix Supermarkets of Lakeland, Fla., with 142,000 employees. The second largest is Hy-Vee of West Des Moines, Iowa, with 51,000 employees. Woodman's Food Markets of Janesville, Wis., also is employee-owned, the report said.
Rodgers said the impact of an ESOP varies. At most companies, he said, the effect is minimal. He said ESOPs often are formed so owners can sell the business. In most ESOPs, employees do not buy the stock; instead, it is awarded to them annually, sometimes based on compensation levels or seniority.
Jacobsen opened his first store in 1948 under the Tri Dairy name. He changed the name to PDQ Food Stores upon opening his second store in 1962. The company now has stores in Madison, Milwaukee, Minneapolis-St. Paul and Tahoma, Calif., the paper said.
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