Pappas Seafood Co., the crab cake chain that counts Oprah Winfrey among its famous fans, has been sold to Teamshares, a financial technology firm and holding company based in New York City. The sale price was not disclosed, and it comes nearly a year after founder Mark Pappas died. His son, Steve Pappas, who took over the business, says he plans to stay involved in daily operations and advise a new incoming president until he eventually retires.
Teamshares is publicly traded and builds its business model around acquiring small companies with the long-term goal of shifting majority ownership to the people who work there, according to The Baltimore Banner. Under its model, employees receive a 10% stake once a purchase closes, with the company aiming for each acquired business to reach 80% employee ownership within 20 years. Pappas marks Teamshares' first acquisition in the Baltimore area, and it now owns more than 90 businesses nationwide, acquiring new ones continuously, per Teamshares Chief Operating Officer Madhuri Kommareddi.
Kommareddi told the Banner that the 80% employee-ownership threshold has not yet been reached at any of the firm's acquisitions, though she said many of its companies have made strong progress toward that goal. She explained that business profits are used to buy down Teamshares' stock in a company, which in turn increases the share held by employees. Teamshares has previously purchased other small operators, including the Don & Millie's fast food chain, which was founded in Omaha, Nebraska.
A Company Mark Pappas Built From a Parkville Bar
Mark Pappas founded Pappas Seafood Co. in 1972, opening the first Pappas Restaurant & Sports Bar in a former Parkville stag bar, according to the same Banner report. A separate account from The Baltimore Sun lists the company's founding year as 1971, a discrepancy the available record does not resolve. Either way, the business has operated for more than 50 years, building a following that includes Oprah Winfrey, who reportedly became a fan while living in Baltimore and working at WJZ.
Today the Pappas restaurant group includes five locations, among them a distribution facility in Perry Hall that ships crab cakes to both customers and the company's own restaurants. The Sun reported in 2023 that Pappas operated restaurants in Cockeysville, Parkville, Glen Burnie and Bel Air, shipping orders across the United States and Puerto Rico, and that the company was shipping roughly 3.5 million crab cakes a year as of 2022. WBAL-TV has also reported that Pappas was working to expand shipping capacity to handle more than 80,000 orders a month, growth the station tied to a surge in demand during COVID-19 shutdowns.
Why Steve Pappas Decided to Sell
Steve Pappas, Mark Pappas's son and the company's former owner, told the Banner that running the business had become overwhelming as its five corporations pulled in different directions. He said his children were not interested in taking over the restaurants and that he did not want to push them into the business. Pappas added that restaurants need strong financial backing to survive the industry's current challenges, and he learned about Teamshares through a broker.
He said he disclosed the sale publicly to put an end to community rumors and reassure longtime customers. Pappas told the outlet he expects crab cake prices may rise before they eventually come back down, and that Teamshares' national footprint could help the company negotiate better rates with suppliers. He also said the firm could help Pappas grow its presence on third-party ordering platforms such as Uber Eats, and that the restaurants will remain as customers have known them, if not better.
What Changes, and What Stays the Same
Teamshares plans to install a new president at Pappas and will look for ways to create more consistency across the five locations while seeking ways to boost profits, per the Banner's reporting. Eric Braunstein, the firm's industry lead for food and beverage, noted that Pappas restaurants currently serve different french fries depending on location — a small but telling example of the inconsistency the new ownership hopes to iron out.
Despite the ownership change, several familiar faces are staying put. Justin Windle will remain at the Cranbrook location, and Karen Zimmerer will continue as general manager of the Perry Hall site. Steve Pappas will keep ownership of the buildings at the Perry Hall and Parkville locations even as the business itself changes hands, and he said customers walking into any Pappas restaurant are unlikely to notice a difference. He expects to retire in about two years and plans to find someone else to eventually run the chain, telling the Banner the company now has an investment group behind it.
