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'How am I supposed to make a living?': Vancouver restaurant owner faces post-pandemic bankruptcy

"Everything is gone," said the sandwich shop owner. "I don't know what I'm going to do. I don't have a penny to my name right now, I don't have any assets." 

A Vancouver sandwich business with two downtown locations has come to an abrupt end after its owner found himself in financial distress due to the pandemic.

Both Hubbub restaurants, at 859 Hornby St and 420 Robson St, shuttered in early January due to unpaid rent.

Owner Faisal Khan told V.I.A. over the phone he has spent the last couple of years struggling to keep the doors open at both sandwich shops, however, the business has not been able to sufficiently bounce back from pandemic-era shutdowns and diminished revenues.

Khan said he came to own the previously popular sandwich business after moving to Vancouver and the sale of two Subway franchises he owned in Merritt. He explained that Hubbub's original owners' partnership had been severed, and the remaining owner wanted out, so the business was for sale.

'It was all downhill from there': New owner takes over as COVID takes hold

The sale of his Subway stores went through in February 2020; Khan officially became the owner of Hubbub on March 23, 2020 - right when everything came to a screeching halt due to the onset of the COVID-19 pandemic.

"It was all downhill from there," recalled Khan. "As soon as I bought [Hubbub] we were shut down for three months."

Khan described month after month of financial struggles, as he secured personal and small business loans just to keep the two locations afloat.

Even after restaurants were permitted to re-open, Khan said his sandwich shops were only seeing about 30 per cent of the revenue they had brought in pre-pandemic.

Khan said that the federal and provincial aid offered to small businesses like his was insufficient to help, noting that the rent subsidy was only available to cover part of the cost and had to be applied for by the landlord, not the business operator. Further, while he was able to take out pandemic relief loans, they were simply adding onto what ultimately became insurmountable debt.

Landlord did not approve prospective new owners for Hornby Street location

In 2021, when it was apparent the business was not going to bounce back, Khan went in search of a buyer. He said in the interim, he continued to seek out payment deferrals, credit line extensions, and further loans.

His hope was that with just one restaurant in his hands, he could manage the expenses and get back on his feet.

When he had a prospective buyer for the Hornby Street location in mid-2022, Khan said the landlord would not entertain the offer until Khan brought his rent up to date, which he did. However, Khan said the landlord, named as Morguard Investments Ltd on the "notice of seizure" posted on the restaurant door, deemed the prospective buyer too inexperienced, and would not approve the sale.

Khan carried on with both locations, but by September 2022 was unable to pay rent. He did not pay rent in October or November, at which time he found another prospective buyer for the Hornby shop. This time, because he was unable to pay the back rent, the landlord again refused to accept a sale; Khan said he told the landlord the sale was the only thing that would enable him to pay the back rent. 

On Dec. 5, the "notice of seizure" was posted, but the landlord gave Khan 30 days to work things out and pay his back rent. 

The Dec. 5, 2022 notice indicates Morguard Investments Ltd is owed $13,748.98 plus costs, charges, and expenses "being the amount owing pursuant to a certain lease agreement."

Those fees include a $2,474.82 seizure fee and a charge of $1,368.00 for "time," bringing the subtotal to $16,415.94. The notice indicates a bank draft of $4,000 has been factored into the amount due (which constitutes two months of rent plus fees), bringing the final amount owed at the time of the notice to $12,415.94.

Having bought Hubbub with no debt to his name, Khan said he now owes banks, landlords, and creditors close to half a million dollars for the two sandwich shops.

Khan, who came to Canada in 2001 with his wife and three children, described working as a pizza delivery person to get a start in his new country. 

"I've been working, and working hard," he said of his career. Now, 20 years later - and about to turn 60 - Khan said his future is uncertain.

'Everything is gone'

On Jan. 5, the landlord locked Khan out at 859 Hornby St. A few days later, the landlord terminated Khan's lease at Robson Street. 

"Everything is gone," Khan said. "I've been in business for over 20 years; I don't know what I'm going to do. I don't have a penny to my name right now, I don't have any assets." 

"I'll be filing for bankruptcy," Khan continued. "I've been in bad situations before, but I've never had to file for bankruptcy. What choice do I have?"

"I don't know what to do or who to contact," Khan added. "How am I supposed to make a living?"

Khan points to some large-scale businesses that weathered the pandemic and even turned record profits. 

"The way the system works, the landlords, the large corporations, they can get away with murder," Khan said.

The lease terminations mark the end of Hubbub now in Vancouver. Hubbub, which served sandwiches or salads based on a selection of base proteins, has been at this location for over a decade. The business ultimately grew to have three outposts in Vancouver; a third one on Cambie at 7th was short-lived. 

For now, Khan is faced with weighty, life-changing financial decisions. "I'll be working for the next 10 years at least," he said. "I've got to figure out what I'm going to do."

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