Jay Guben made his name in Philadelphia as a restaurant and head of the highly regarded Restaurant School, where he taught entrepreneurs how to make payrolls as well as pastries. These days, however, he is serving up capitalism of a different flavor. As director of the O&O Investment Fund, he helps organize worker-owned cooperatives.

The fund, which offers more consulting than capital, got its start in 1982, when it helped launch two Philadelphia food stores, called O&O Supermarkets. The projects were supported by the United Food & Commercial Workers Union, which represents supermarket workers in the area, and today the union still lends to the O&O Fund about a quarter of its $500,000 annual budget. The rest comes from grants and consulting fees charged to the start-up stores.

Lately, however, the union has been trimming its financial support, and the fund has been striking out in new directions. Next on the schedule is a prototype O&O Neighborhood Store, which Guben describes as "somewhere between a convenience store and a supermarket." If that projects succeeds, plans call for five more such stores to be launched in 1984, at about $500,000 each. Financing will come from various sources -- urban development grants, worker equity, O&O investments, and about $250,000 in bank loans. The O&O Fund will provide management training for the owner-workers, technical help on getting the bank loans, and advice on operations and marketing strategy.

O&O's concentration on the food retailing business may be unique, but the company isn't the only one helping to midwife worker-owned businesses. The Industrial Cooperative Association in Somerville, Mass., has been providing similar assistance to worker-owned coops in various cities and industries for more than five years, backed by grants from the Ford Foundation and others. It recently set up a loan fund to complement its consulting work.

Guben sees further opportunities for worker-owned co-ops in the restaurant and home health care industries -- two areas the O&O Fund has targeted for possible projects. But he is making no sweeping predictions about the movement's future. "The co-op idea doesn't necessarily work in every industry," he admits.

Published on: Apr 1, 1984