‘The minimum wage for these jobs is actually zero’: Jake says Homegrown’s collapse shows what Seattle costs small businesses

Homegrown once had a dozen sandwich shops around the Seattle area. By the day before Thanksgiving, it will have none. KIRO host Jake Skorheim said that’s what happens when the cost of running a business keeps climbing.

“The minimum wage for these jobs is actually zero, because this business is now gone,” Jake said on “The Jake and Spike Show” on KIRO Newsradio. “They’re not making any sandwiches anymore.”

Homegrown’s last two stores, at 999 Third Ave. in downtown Seattle and on Mercer Island, will close around Nov. 25. The catering business that runs out of the Mercer Island location will close too, CEO Brad Gillis told The Seattle Times. Gillis didn’t give a specific reason. In 2024, Homegrown blamed rising labor and food costs when it closed 10 stores and laid off 158 workers.

Gillis and his childhood friend Ben Friedman started Homegrown in Fremont in 2009. They called their approach “sandwich environmentalism”: organic ingredients, sustainable materials, and prices to match.

A perfect storm

Jake walked through Homegrown’s last few years. Workers unionized with Unite Here Local 8. Employees went on strike in 2023, and the walkout lasted 119 days. It ended with a contract that included raises and a paid 30-minute break.

“Imagine paying rent on a location as expensive as it is and your workforce is on strike,” Jake said.

Then last November, the Washington State Department of Revenue revoked Homegrown’s business license over more than $472,000 in unpaid taxes and penalties. Both shops reopened about two weeks later.

Jake questioned how a tax bill that size happens.

“I don’t know if this is mismanagement,” he said.

On top of all that is Seattle’s minimum wage, which rises from $21.30 to $22.14 an hour on Jan. 1, according to the Seattle Office of Labor Standards. Jake did the math: that 84-cent raise works out to about $1,747 more a year for every full-time worker.

Coming from every side

KIRO host Spike O’Neill said he understood why Homegrown should have worked. He loves a good hoagie, he said, but his wife reminds him that processed deli meat isn’t great for him.

“A shop that says, ‘Look, we want to source these things right,'” Spike said. “These guys should be solid as a rock.”

Spike clarified that labor is only part of the problem. Food costs are up, and diners are cutting back.

“People’s budgets have tightened, and oftentimes dining out is one of the first expendable expenses that families decide to do without,” Spike said. “Restaurant owners got it coming from every side here, with cost of labor, with food costs, with customers spending less.”

He pointed to other Seattle restaurants that are struggling. Pam’s Kitchen in Wallingford closed after more than 20 years, he said. La Palma in Queen Anne has turned to a 30-day TikTok challenge to bring in enough customers to stay open, according to MyNorthwest.

“It’s tough to run a restaurant these days in Seattle,” Spike added. “The city doesn’t make it any easier on you.”

‘Every single little thing’

During the segment, Jake said a listener who owns a sandwich shop texted in about how thin the margins are.

“You buy a box of lettuce, it’s $90,” Jake said, reading the text. “You can go to Costco and buy it on your own there. You can save $50.”

He said the owner’s message was that every dollar has to be watched, and that workers who complain about pay don’t see how close many owners are to losing it all.

“It’s very difficult for these business owners who are barely scraping by to make any money,” Jake summarized.

“We’re making it harder every day,” Spike added.

Listen to “The Jake and Spike Show” weekdays from noon to 3 p.m. on KIRO Newsradio 97.3 FM.