Utah-based Even Stevens restaurants are misleading customers, two former employees allege, because the shops continue to advertise a “buy one sandwich, give one to charity” model, yet the company has not donated proceeds in more than six months.
“Basically, they are not being transparent with customers,” said Lauren Singer Katz, who was Even Stevens’ brand manager. “If they are not donating, we have a big problem with that because that is what they are advertising.”
Katz was one of more than a dozen employees let go in November as the struggling sandwich company — which had grown rapidly since its 2014 founding — reduced expenses and restructured. The cost-cutting also included closing five of its eight stores in Arizona, shuttering its solo stores in Texas and Colorado and moving the corporate headquarters to a less expensive site.
Even Stevens also suspended its charitable giving in August but said it would be for only 60 days. At that time, Brooks Pickering, the chief restructuring officer, said the 80 nonprofits that partnered with each store would continue to accrue credits and the funds would be given retroactively once a new giving program was introduced, which he expected to announce sometime at the first of October.
Months later, Even Stevens donations remain on hold, which is frustrating former employees like Katz and Sara Day, who quit in June as Even Stevens’ cause director and overseer of the company’s nonprofit arm.
Katz and Day said they were initially enthusiastic about working for a "company with a cause” and worked hard to make it successful. And it was. Before August, it had donated more than 3 million sandwiches — worth almost $2 million.
But the company expanded too quickly, said Katz, “and a really great thing was ruined because of greed.”
Even Stevens didn’t donate actual sandwiches. Instead, at month’s end, the company multiplied the number of sandwiches sold by 54 cents — the average cost of its sandwich ingredients. That money was distributed to nonprofits in the form of a credit with national food supplier Sysco. The groups used the credits to order ingredients they needed for their food programs, and Sysco delivered the products to their door.
Day believes Even Stevens could do more to inform the public about its current status.
“It should be made abundantly clear on the company’s website, online ordering and social media that they are not currently donating but have plans to in the future,” she said. “Currently there is zero information about this on any of these platforms.”
Day questions whether Even Stevens is violating state charitable solicitation laws, ensuring that companies promoting a charity element are following through with their promise. “I don’t want to wave a giant red flag and say they are committing blatant fraud,” she said, “but there needs to be clarity on their plans and customers should know before they purchase.”
The criticism is unwarranted, said Pickering, who underestimated how long it would take to turn around the company, which was in dire financial trouble, losing nearly $800,000 a month. “The losses were huge and had been for many months.”
During a recent interview, he said he expects the company “to be profitable in the second quarter” of 2019. At that time, charity contributions will resume. “We are completely committed to our community programs. Nothing has changed there,” he said. “But the reality is the financial situation was much more challenging than I originally thought.”
The problems are complicated and involve co-founder Steve Down, who also owned event centers in five states — including The Falls Event Center in Salt Lake City. That company is now in bankruptcy.
According to a lawsuit, filed by the U.S. Securities and Exchange Commission, Down was accused of making misrepresentations by building and operating the centers using high-interest loans from private investors.
Down, a self-described “cause capitalist," agreed to pay a $150,000 fine without admitting or denying the allegations.
Down also is no longer involved with Even Stevens, Pickering said, and the two companies are separate entities.
Despite Even Stevens’ financial struggles, Pickering maintains the company has been upfront with customers and charities. “We haven’t been hiding. We publicly announced that we were suspending the giving program, and if customers ask our associates, they will tell them what’s happening.”
He said the nonprofits have been notified, and Even Stevens has invited a handful of them to be part of an advisory board that would help create a new giving program.
Even Stevens, though, can’t afford to reprint menus or change the mural-like signs that still promote the “buy-one, give-one” program at its remaining 13 stores — including eight in Utah, three in Arizona and one each in Idaho and Washington.
“People are disappointed we are not giving," he said. "It’s not that we don’t want to give; it’s that we can’t. It’s not possible to give money you don’t have. That is the challenge.”
More than two dozen Utah charities received funds from Even Stevens. Each store selected four charities to support, and there was overlap. The groups ranged from Boys & Girls Clubs to Rescue Mission Salt Lake, the YWCA and Crossroads Urban Center.
Catholic Community Services received about $6,000 a month from the Even Stevens giveback program, which was used to buy food and supplies for the St. Vincent DePaul dining hall in Salt Lake City and the Joyce Hansen Hall Food Bank in Ogden, said communications director Danielle Stamos.
“It was an incredible partnership,” she said. “It was stable and consistent, and it really made a big difference for us. We felt really lucky to be a partner.”
Stamos said CCS received an email in July that the donations would end but would begin again. It got another communication at the start of 2019 that Even Stevens still was working on resuming a charity program.
“We have had a little bit of concern. One of our biggest things here [at CCS] is accountability to those who give to us. At every step, we need to be as honest and transparent an possible,” she said. “But it was such a great partnership. We are hopeful that it continues. We are trying to be patient and give them the benefit of the doubt. Everyone goes through difficult times."