Boba Guys founder on what it’s like to lay off 400 people, shutter 17 locations in a single day

Boba Guys owners Andrew Chau and Bin Chen closed 17 locations in a single day this week. Boba Guys owners Andrew Chau and Bin Chen closed 17 locations in a single day this week. Photo: Blair Heagerty / SFGate Photo: Blair Heagerty / SFGate Image 1 of / 9 Caption Close Boba Guys founder on what it’s like to lay off 400 people, shutter 17 locations in a single day 1 / 9 Back to Gallery

Nine years.

That’s how long it took Andrew Chau and Bin Chen to take Boba Guys from a pop-up in a Mission ramen shop to a veritable bubble tea empire, with 17 locations in seven different cities, including nine in the Bay Area.

Fifteen days.

That’s how long it took for everything to completely fall apart.

This week, Chau and Chen laid off 400 employees, temporarily shuttered all 17 locations and stopped taking a salary just 15 days after the first case of coronavirus was confirmed in the United States.

The pair spent recent days projecting how many weeks the business can survive from this point, while still cutting rent checks for vacant buildings, unused utilities and insurance.

“I planned up to a 12-week window,” Chau says. “If we don’t see light at the end of the tunnel in May, we need a loan or something because we’re then screwed. Nobody is going to make it through this if we go all the way through Memorial Day.”

Spain, France, and the UK have all closed down restaurant and bar activities in the last week to prevent the spread of coronavirus, all pubs in Ireland have closed, and, as of Friday, 15 states in the United States had closed bars and restaurants to dine-in only service.

Director of the National Institute of Allergy and Infectious Disease Anthony Fauci said last Sunday on CNN that he wouldn’t rule out supporting a national lockdown on the country’s restaurants to help flatten the curve (more on that here).

“I’ve never cried so much,” Chau says. “Letting go of my team...”

He trails off, and makes a concerted effort to finish the interview without going back to that place.

“Most small business owners are American dream owners,” he says, including Chau, a first-generation U.S. citizen. “So many of those are broken and dying right now. It’s beyond my company, it’s a whole sector — burrito places, mom and pop shops, they don’t have the same runway or visibility. What’s causing panic and anxiety is uncertainty.”

The difference between a 4-week shutdown, an 8-week one, and 12-week one could potentially mean magnitudes of restaurants closed forever.

“We’re not built to handle four months down — two months down is hard enough. I would say I know more than two hands worth of places that have been texting, DMing me, saying ‘I’m about to run out of money, what do I do? What do I do with my employees?’” Chau says. “I do not think this will be over April 8 (when the shelter-in-place order is scheduled to be lifted). We’re seeing other countries go through it, and no one has really had a three-week window. We had to face a big reality — either go into hibernation on April 8 if they extend it, or now and stop the bleeding.”

Not everyone has that luxury. Even as the downturn began, many bars and restaurants depleted capital reserves, paying a full staff while business began to shrink. For those that do make it out of the shutdown, they’ll need dollars to ramp back up and retrain new staff members. Chau admitted that if the business does make it the 12 weeks and have an opportunity to reopen, it may look nothing like it does now.

“Some Boba Guys stores that can reopen even after 12 weeks will, but larger stores with a tea bar, and food, that’s gonna be hard. No one’s gonna sit or really enjoy themselves right after this is over.”

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Grant Marek is the Editorial Director of SFGATE. Email: grant.marek@sfgate.com | Twitter: @grant_marek