After the recent permanent closures of Rocky Mountain Coffee Co. and The Social Room, 29 people have been left without jobs. But owner, David Gan, says he has been trying to keep the businesses afloat for months.
Gan has owned Rocky Mountain Coffee Co. since 2016 and in 2017, was awarded the contract to provide retail food services in North Island Hospital Comox Valley and Campbell River campuses. However, a few months after the cafés in the hospitals opened, Gan moved back to Singapore to care for his sick mother.
Since then, he has been travelling back and forth between Canada and Singapore to run his businesses. In 2018, he also opened the Social Room in Comox with a business partner.
“Of course when you’re not around much of the time, you are not able to manage the business properly. So I think that’s when the business kind of started its up and downs,” he said.
According to Gan, the business really started struggling towards the end of 2018, losing a total of $190,000 last year. Gan added he had tried to sell the businesses in November of 2018, and began trying again in February of this year. But there were no takers.
“Even when the money’s negative, I have always taken money out of my own pocket to pay the payroll,” said Gan. “And I would say in the last six months, I’ve probably put in myself more than $100,000 into the business just to pay payroll and to pay the suppliers. What I really wanted to do was to sell off the business and get someone to take over the café so the staff could continue to have a job instead of just closing it.”
He acknowledges that many employees received paycheques that bounced within the last month, but he said he made sure most of them received their paycheques through an e-transfer the next day. When reached on Wednesday, he added there were still four employees who have not received their paycheque from April 30, but he hoped to rectify the situation this week.
On May 10, Rocky Mountain Coffee Co. and The Social Room managers decided to close the businesses due to the rising number of unpaid bills from suppliers. Gan says he was hoping to keep the cafés open longer in order to sell the businesses, but ultimately left the decision up to the managers.
As for the café and restaurant’s suppliers, some are still owed money, but Gan says he is slowly paying them off, with the more urgent bills getting paid first.
“In my honest truth, I’ve tried my best to keep the business afloat for as long as I possibly could but I also don’t own a bank. I can’t keep on taking money. I also have my own family to take care of.”
He says the reason the businesses were losing so much money was that they were overstaffed and Gan himself was not able to operate the business locally. He said the businesses’ labour costs were 70 per cent – way above the ideal 33 to 35 per cent – due in part because of the need for additional managers.
Gan added that he wanted to pay his staff a fair wage and provide benefit packages for managers, and he was not willing to reduce staff wages or increase prices.
Rocky Mountain Coffee Co.’s main branch in Comox was closed in December after a flood. The shop was not reopened, as there was only a few months left on the lease. The official closure of each café location and the Social Room was announced on Friday.
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