This radical vision of restaurant ownership

Nikki Garcia (center), who runs the pop-up Asúkar out of Understory, delivers a plate of samboosas to Gem Datuin (left) and Mika Hernandez.
Kristen Murakoshi/Special to The Chronicle


July 21, 2022 (

In March, a little-known Oakland restaurant got some surprising news: It had won one of the food world’s highest-profile awards.

Understory, a colorful, worker-run restaurant that opened at 528 Eighth St. in spring of last year, had won the James Beard Foundation’s emerging leadership award. It honors “the visionaries responsible for creating a healthier, safer, and more equitable and sustainable food system.”

At Understory, diners eat crispy oyster mushrooms and tacos in a parklet decorated with a mural of farmworkers. The food is an unapologetic mélange of culinary influences. After years of cooking other people’s food, the staff designed a menu to mirror their identities: Filipino adobo, Burmese semolina cake, Moroccan lamb tagine, a Mexican chile relleno. The restaurant also doubles as an activism hub, where people come to write letters to incarcerated queer and transgender people while employees talk about racial justice.

Understory offers a radical vision of what a restaurant can be.

Workers’ rights are foundational to Understory’s operations. Spurred by the pandemic and his own experiences in “toxic” kitchens, founding collective member Sean Chow said worker ownership felt like the most sensible way to address historic inequities in the industry. The former cook founded Oakland Bloom, the nonprofit that launched Understory.

Six worker-owners, who have backgrounds in food and community organizing, make all decisions collectively, from pay to menu changes. Salaries are based on need, not job title. The staff, who call themselves worker-leaders, voluntarily pool tips into a shared fund that any of them can tap into in case of an emergency.

Redefining Restaurants

Welcome to Redefining Restaurants: a four-part series examining how Bay Area restaurants are working to transform the industry, from removing tips and increasing wages to establishing worker ownership. Read the first two stories on Good Good Culture Club and Che Fico, and look for the next installments, published every week this month, at MORE

They let unhoused people sleep in their outdoor parklet, painted with a rallying cry of “the people, united, will never be defeated!” in multiple languages. There’s always a pay-what-you-can dish on the menu for people in need — recently lugaw, a nourishing Filipino rice porridge topped with mushrooms, garlic and chile oil.

“The beauty of the project was that we could really start from scratch and re-imagine everything, from top to bottom,” Chow said.

Cooperative food businesses have a deep history in the Bay Area, and more are on the rise. Two of Understory’s worker-leaders came from Reem’s in San Francisco, which is transitioning to worker ownership. A wave of Bay Area restaurateurs hoping to change the industry is experimenting with other models, from abandoning tips to sharing profits with workers.

Understory — named for the critical layer of a forest that helps plants and trees thrive — offers a different approach, one that its worker-owners hope others will adopt. It’s not been without its challenges. Equity is expensive: Labor costs are high, and keeping up with inflation and the ups and downs of the pandemic have proved difficult. After months of limited hours and outdoor dining only, the restaurant opened indoors for the first time this month, which they hope will spur sales. Yet the restaurant is profitable, according to worker-leader Jenabi Pareja.

It’s a complicated business model — trying to go against the status quo is costly and difficult, Chow said — but one more restaurants are becoming interested in. Understory has fielded inquiries from restaurant owners wanting to learn about their approach, the worker-owners said. Here’s what you need to know about some of the most critical aspects of Understory’s model.

The restaurant is operated in partnership with a local nonprofit.

The space at 528 Eighth St. was originally slated to be a Southeast Asian restaurant from Chow, who previously worked at popular Bay Area restaurants including Hawker Fare, Nopalito and Pizzaiolo. When the pandemic hit, he decided to turn it into an extension of his Oakland Bloom nonprofit, which helps low-income refugees, immigrants and chefs of color start food businesses.

To him, worker ownership was essential, so he restructured the business so that the majority of the shares are held by a separate LLC (limited liability company), the Understory Worker Collective. Through this LLC, the workers control all decisions related to how to use or distribute profits. Understory operates as a for-profit restaurant, but payroll, insurance and programs, like an incubator project for chefs of color, are funded by Oakland Bloom.

It’s an unusual structure for a restaurant, but one that made Understory possible.

Chow hopes to eventually start what he believes will be the nation’s first cooperative restaurant group — and is starting to look for investors and financing.

A bowl of lugaw, Filipino rice porridge topped with mushrooms, left, was a recent pay-what-you-can dish for people in need. Tips, right, are pooled and go into an emergency fund for workers. Photos by Kristen Murakoshi / Special To The Chronicle

There’s no hierarchy.

At Understory, there is no head chef or single owner. They decide together whether to raise prices, add happy hour or raise wages. They rotate positions and responsibilities. Some cooks sit on human resources and social media committees; others might help mix drinks while also working the host stand.

In a recent collective meeting, new dish ideas bubbled up organically rather than as a top-down directive coming from one person. Von Champaayouroth, Understory’s newest worker-leader, pitched popcorn chicken marinated in herbs and fish sauce, and a new dessert, coconut milk tapioca soup with melon and crushed ice.

It’s a far cry from when she cooked in Ritz-Carlton hotels and felt like she had no voice as an employee, and no way to express her Laotian background.

“It feels like I have more creative freedom. It feels good to have a say in making decisions. I’m able to make unapologetic food here,” Champaayouroth said.

Understory uses a radical compensation model: need-based salary.

A need-based salary is virtually unheard of in the restaurant industry. Most Understory employees make $26 per hour, plus health and dental benefits, but they agreed that some workers should get paid more.

Nino Serrano, for example, is supporting a family of six, so he makes $28 per hour. In past restaurant jobs, the Filipino immigrant said he struggled with low wages and exploitation. At Understory, he no longer has to worry about working longer hours or a second job to support his family.

“Having basic health (care) access, having a livable wage … has been a really big help,” Serrano said in Tagalog through a translator.

Tips are pooled into an emergency worker fund.

Tips, a flashpoint in the restaurant industry, are repurposed at Understory. Employees can choose to put half of their tips into a designated fund workers can use in the case of an emergency. Everyone so far has opted to contribute their tips in full.

When Serrano’s baby was born early, he used the fund to take additional time off.

“Sometimes in your traditional workplace, you’re just one paycheck away from not being able to make ends meet,” worker-leader Pareja said.

Understory breaks down barriers in the industry for immigrants and people of color.

Sanela Osmancevic had long wanted to start her own Bosnian food business. But the immigrant and restaurant worker didn’t see a path forward in an industry rife with mistreatment and low pay. She worked under managers who yelled often and would “speak to you as if you’re not on the same level as them.” At one restaurant, a customer told her to “go back where you came from.”

Now, she runs a Bosnian food pop-up at Understory, serving ćevapi, mini sausages tucked into pita with a red pepper sauce, and crispy, meat-filled phyllo dough. She learned how to portion food, set menu prices and more through Oakland Bloom’s incubator program. Understory, in turn, provides program participants with free kitchen space and opportunities for pop-ups and catering. It has provided a safety net for Osmancevic, a single mother of two young children living in Oakland.

Cooks who graduate from the program can also become worker-owners — like Nikki Garcia, who runs Palestinian-Cuban pop-up Asúkar out of Understory. A longtime employee of the cooperative Rainbow Grocery in San Francisco with no restaurant experience, she credits Understory with giving her the confidence to start a food business. She melds her Palestinian roots with her husband’s Cuban background in dishes like sumac chicken with crispy tostones.

Both Garcia and Osmancevic say they wouldn’t have the food careers they do now without Understory and Oakland Bloom.

“I’m really grateful that they exist,” Osmancevic said.

Here, food is ‘inherently political.’

Understory doesn’t believe in divorcing food from politics. The restaurant screens movies to raise funds for nonprofits like Gabriela, a Filipino women’s organization in Oakland, and invites local artists, particularly those who identify as queer, transgender or BIPOC, to display their work.

The Understory team has even voiced mixed feelings about the James Beard award: They’re honored by the platform it gave them, while also wary of an organization working to rebuild after accusations of systemic racism.

They talk actively about Understory’s role in the gentrification in Oakland, where high housing and business costs are pushing out longtime residents and independent restaurants.

“How are we as a storefront not actively contributing to that? And beyond that, how are we in some ways combating that?” Chow asked.

Offering a sliding-scale dish, free commercial kitchen access for immigrants and cooks of color, and hosting community events are part of this mission. These efforts are as much — and perhaps even more so — a measure of success to the worker-owners as the James Beard award.

Elena Kadvany (she/her) is a San Francisco Chronicle staff writer. Email: Twitter: @ekadvany

Written By Elena Kadvany

Elena Kadvany joined The San Francisco Chronicle as a food reporter in 2021. Previously, she was a staff writer at the Palo Alto Weekly and its sister publications, where she covered restaurants and education and also founded the Peninsula Foodist restaurant column and newsletter.VIEW COMMENTS

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