Editor’s Note: This story has been updated from the version in the May 27, 2013 print edition. On opposite sides of the Ventura Freeway in Agoura Hills are two bakeries that take the idea of competition personally. To the south, there’s Abby’s Millstone Baking Co., a European-style bakery that specializes in fresh baked bread and pastries. On the north is Wildflour Bakery & Café, equal parts bakery and café, serving a full breakfast and lunch menu that includes salads, sandwiches and pizza. But the competition runs a lot hotter than who makes the crustier bread or tastier pastries. Abby Franke and Gregory Yulish ran another bakery together for almost two years, but the partnership fell apart after disagreements escalated to legal action, including allegations of verbal abuse and fraud. Lawsuits quickly led to the bankruptcy of their Stone Ground Bakery. Today, Franke operates Abby’s, which he opened in November at the same 5005 Kanan Road location where Stone Ground was founded. These days, he puts the disagreement with his former partner in the past and focuses on “old-school” baking, from milling the grain on site to using a sourdough starter that dates back more than 100 years. “It was scary how fast everything could change,” he said. “But this is beautiful. It’s a second chance.” Yulish, who bought Stone Ground Bakery out of bankruptcy after the legal battle, has renamed it and now operates Wildflour at a location at 29105 Canwood St. where Stone Ground stood when it went out of business. Yulish declined to participate in a story about the two former partners’ dispute, though he did confirm some details and offer Franke a simple wish of “good luck.” Still, a trail of court records, online information and other sources provides many clues to their dispute and highlights a basic difference between the former partners – namely one is an Old World artisan at heart, the other a businessman. Franke, a native of Hagen, Germany, trained as an apprentice baker in Germany and obtained a master baker certificate before immigrating to Los Angeles in 1988 and working at La Brea Bakery in its Encino outlet. Yulish is a certified public accountant who ran several companies, including Encino tax preparation startup Taxes4less.com in 2000. Conrad Lyon, senior restaurant analyst at boutique investment brokerage B. Riley & Co. in Los Angeles, said the food industry is notorious for drawing partners from competing backgrounds. “You often have executives that don’t have culinary expertise and the two butt heads. And then emotions can override logic,” he said. “It happens all the time.” Dividing the dough Franke co-founded Stone Ground Bakery in 2004 with partner Paul Sherman, who died in 2008. Franke then brought on Yulish, a former customer, as a minority partner in 2010. The two agreed on a $500,000 stock purchase that made Yulish 40 percent owner of the bakery, according to court documents. Partially fueled by the investment from Yulish, Stone Ground moved to its larger location on Canwood Street in August 2011, where Wildflour Bakery now stands. But problems began almost immediately after the partnership was formed. Yulish claimed he was appointed chief financial officer but never given access to financial records, allowed to pay bills, make deposits or handle cash. Yulish also accused his former partner of yelling at customers, breaking kosher laws and keeping cash from the business to himself. Those allegations are contained in a lawsuit filed by Yulish in Los Angeles Superior Court in September 2011, the same month tensions climaxed. Franke fired Yulish that month – another allegation in the lawsuit – and by December, the business had filed for bankruptcy. Franke denied the claims of fraud and abuse, and once Stone Ground filed for bankruptcy, the case withered away and was discharged, according to Esther Hopkins, Franke’s Westlake Village attorney, who declined comment but provided an email statement. “Mr. Franke adamantly denies all of the allegations of the complaint filed by Mr. Yulish and maintains that the allegations in the complaint are patently false,” the statement read. During the lawsuit, the court appointed a receiver to look after the business because Yulish made several fraud-related allegations against Franke. David Pasternak, who was appointed receiver in October 2011, said his duties included day-to-day sales and operation of the business. But he found no merit to the claims of financial misconduct. “I never determined any fraud in the time I was receiver,” he told the Business Journal. And less than two months later, Stone Ground filed for bankruptcy, leaving Pasternak little time to asses the actual health of the business. “This was a short-term receivership,” he said. “Money was coming in, but there wasn’t a lot of time.” Both Yulish and Franke declined to comment on their past, as business partners or legal adversaries. Hopkins, Franke’s attorney, said her client didn’t want to say anything negative about Yulish for fear of legal retribution. Yulish said he didn’t want to be involved in anything regarding his former partner’s business. Opposite sides In February last year, Yulish purchased Stone Ground out of bankruptcy for $249,000 at auction. Yulish closed it for three weeks, changed the name and reopened. Though neither Franke nor Yulish acknowledge the other as competition, there are several similarities to the two businesses, other than the half-mile distance between them. Both sell bread that is preservative free, kosher and made from all-natural ingredients. But the contrasts are just as clear. Wildflour occupies more than 5,000 square feet and offers its comprehensive breakfast and lunch menus, in addition to baked goods. What’s more, the Wildflour website said the bakery distributes to more than 150 supermarkets, four hotels, four country clubs, more than 30 restaurants and several public schools. Clients include Trader Joe’s outlets in 13 states, as well as local restaurants such as the new Harvest Kitchen & Bar restaurant at the Hyatt Westlake Plaza hotel in Westlake Village. David Coonan, general manager of the hotel, said all the bread at the restaurant, a farm-to-table concept, is from Wildflour. He said the feedback from his staff and customers on the bread has been positive. “The quality is absolutely terrific,” he said. “They fit our message of local and fresh perfectly.” Meanwhile, Franke has 2,300 square feet and has a much smaller operation. He distributes to about a dozen Albertsons stores ranging from Northridge to Santa Monica, and a few Gelson’s grocery outlets. “We’re real bakers here,” he said. “We like to use our hands and keep machines to a minimum.” Abby’s just opened in November. And though Franke’s business is still in the red and many of his Stone Ground distribution customers have not returned, he said the road to recovery has taught him valuable lessons. In the heyday of Stone Ground, before Yulish joined in 2010, Franke said the company had annual sales in excess of $2.5 million. Since the business failed, he’s spent much of last year dealing with the financial fallout, including a personal bankruptcy. He said, though, that sales at his new bakery are increasing each month. “We are far, far away from those days,” he said. “I hope to break even soon.”
Sour Dough?
