Study Overview
Converting existing businesses into cooperatives is a strategy to preserve jobs and wealth when an owner wishes to sell or close their business. Conversions typically seek higher compensation, a better working environment, and to create a democratic culture. However, little empirical research exists on the benefits and challenges for owners and workers across different models of employee ownership. This paper presents two case studies of employee ownership conversions. Proof Bakery in Los Angeles converted to a worker cooperative in 2021, while Firebrand Artisan Breads in Oakland was converted to a steward-ownership company in the form of a perpetual purpose trust in 2020.
Study Results
The paper finds that as a worker co-op, Proof Bakery experienced increased revenues, higher wages, and improved job satisfaction among its worker-owners. As a perpetual purpose trust, Firebrand maintained its social mission of hiring marginalized populations while achieving financial stability with the support of value-aligned investors. Additionally, Proof Bakery’s worker co-op model gives direct ownership and control by workers to generate specific outcomes like raising prices and tripling revenues, while Firebrand’s steward-ownership model does not give direct control to workers but operates with a similar purpose to improve wages and working environments for employees. The findings suggest that both enhanced job quality and business stability through their respective ownership conversion models. Additionally, these cases offer lessons on the importance of founder vision in exploring and initiating a conversion; the considerations for company size for selecting different ownership models; and the importance of ecosystem players in enabling the conversion processes.
Intervention: Employee ownership models
Research Partner: Institute for the Study of Employee Ownership and Profit Sharing
Populations: Low-wage workers
Working Paper: Ji, Minsun. 2025. Article 6: Case Studies of Worker Ownership Conversion: Proof Bakery and Firebrand Artisan Breads
IBSI Funding Acknowledgement: Ownership Initiative
News & media
The Promote Ownership by Workers for Economic Recovery Act (AB 2849) Panel
June 13, 2023
The Promote Ownership by Workers for Economic Recovery Act (AB 2849), codified in Labor Code sections 10000-10010) establishes a panel to study the creation of an Association of Cooperative Labor Contractors, among other potential activities, to facilitate the growth of democratically-run high-road cooperative labor contractors.