Ownership
How two business founders are sharing the wealth with their partners and staff, and assuring that their values endure long after they depart.



My friend and colleague, John Abrams, has been writing about Perpetual Purpose Trusts of late. This week he posted an article about a PPT recently formed by the Zingerman’s Community of Businesses (ZCOB) in Ann Arbor.

"Here’s my simplified version, with all the parts:

• Any one of the 750+ Zingerman’s employees who has completed a 90-day orientation can purchase a share of ownership for $1,000.  Each year a share of the profits are distributed to each and the investment is recovered after a few years. 

• There are 18 managing partners who own the 12 ZCOB businesses. Two of them are Ari and Paul. They all share another portion of the profits.

• Each Zingerman’s business pays 3.1% of annual sales to an entity called Zing Intellectual Property (ZIP) as a royalty for the brand that has developed over time.  ZIP pays the founders and provides a second layer of profit sharing to owners, currently 5% of the operating income. Over time, as Paul and Ari divest their interest, this will grow, to as much as 50 or 60% being distributed to shareholders.     

• Finally, there is the Perpetual Purpose Trust, the key ingredient. The PPT will ensure that the Zingerman’s mission and values will outlive the founders. The only beneficiary of this trust is purpose – no person, just purpose.

"The Trust has, in perpetuity, veto power over any sale of the intellectual property and significant use of the Zingerman’s brand.  The job of the Trust board and its Protector Committee and Enforcement Committee are to maintain, defend, and protect the Zingerman’s Community of Businesses. Zingerman’s will remain Zingerman’s." - John Abrams

Article: Perpetual Purpose Trusts (Part II)

Related Article: Can Companies Force Themselves to be Good?