THE TEA ON CANNON'S COFFEE CART — Billed as a hot local upstart, the Rāko Coffee Cart in Cannon brought specialty espresso to caffeine-dependent Capitol Hill. But 14 months after its launch in the Cannon basement, the business imploded when investors based in Dubai who had propped up the Arlington-based coffee roaster pulled the plug, leaving chaos and unpaid business partners in their wake. Some of the friendly faces pulling espresso at the rebranded Cannon Coffee Cart are former Rāko employees who Sodexo kept on to keep serving coffee. But others quit back in October when they worked for four weeks without pay. (Sodexo made them whole when the large House food services contractor took full control of the cart.) The company was supposed to be expanding, with rumors of the acquisition of a local doughnut brand and a confirmed contract with Amazon's HQ2 in Crystal City. Outside investors provided startup capital for Rāko's roastery and brick and mortar cafe in Arlington and they had committed to providing costs for additional locations around the D.C. area. Coffee graveyard… But Rāko's cafe in Arlington's Courthouse neighborhood shuttered last month and within days, green seizure tags were on equipment and furniture, suggesting there were unpaid debts to the county. On Monday the Arlington County Treasurer's Office announced a public online auction for equipment and supplies left at the now-shuttered 2016 Wilson Blvd, Arlington cafe. "By order of Arlington County Treasurer all equipment, furniture, and fixtures will be liquidated from this location," reads the auction page. The sale will go towards paying the business's tax bill to the county. You've missed your chance to bid on a commercial refrigerator, patio tables, an espresso machine and five-pound bags of coffee. The auction closed Tuesday with all items sold. Investors evaporate… Former Rāko Coffee partners and even the co-founders are owed significant sums of money by the investors, who are based in Dubai. "I personally am owed money, and I've heard from former employees and vendors that I'm not alone," Melissa Gerban, one of the original co-founders of the brand, told Huddle. Another former employee who spent three years working with the company told Huddle he estimates he is owed tens of thousands of dollars by investors who now will not take his calls. The investors, Sekhar Mutha, who was one of the owners of Rāko, and Sid Jain, who consulted for the company, did not respond to repeated requests for comment from POLITICO. Murtha and Jain had a national vision for Rāko and wanted to aggressively expand the business, according to former leaders of the company who spoke with Huddle. They ousted Gerban, who co-founded the brand with her sister, from leadership and cut her out of discussions of the business expansion. "The Capitol cart was sustainable on its own," Gerban said. "However the others had not yet recouped the initial investment or recovered from the impact that Covid had." Rāko did not seek out the perch in the Cannon basement. The House's food service contractor Sodexo approached Rāko, a women-founded local small business, to see if it would be interested in partnering to serve the House. Huddle readers raised concerns back in Oct. that the option to tip was removed as the coffee cart moved to the Sodexo's payment system. But workers in recent weeks have said they like the more reliable standard wage given the variability of tips (which took serious dips during recess weeks, for example.) The rebranded Cannon Coffee Cart now uses beans roasted in Arkansas, not Arlington. It has the seal of approval from our own Arkansan, Jordain, who drinks more coffee than anyone should. The Chief Administrative Office downplayed the transition from Rāko to the Cannon Coffee Cart, promising that "Sodexo will continue to provide high-quality service, coffee, espresso drinks, and snacks for the House Community and guests to enjoy." They touted the local Hyattsville business Clement's Pastries that provides the baked goods to the cart and has been operating in the region since 1928. The CAO did not address questions about Rāko's contract or what was known about the foreign investment when it partnered with the House, which appears to have been almost wholly dependent on the investments from Dubai. Sodexo declined to comment on the record by Friday morning.
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