Bathurst Street shawarma war is no laffa-ing matter

Rival shops south of Lawrence Avenue have nearly identical menus.  PAUL LUNGEN PHOTO

TORONTO — If you go back five or 10 years, you’d be hard pressed to find many in the Jewish community who could tell you what a “laffa” was.

Today, if you venture to Bathurst Street south of Lawrence Avenue, in an otherwise unremarkable strip mall, you’ll find two restaurants that bear the name Laffa. One, which has been in business since 2013, is Dr. Laffa On The Go. The other, which opened for business a few months ago, only two doors away, is Famous Laffa.

Besides sharing similar names and both enjoying kashrut certification under COR, the restaurants’ menus are eerily similar. Not only do they both offer the same Middle Eastern dishes, often made with laffa, a large soft flatbread that is used as a wrap, but their prices on a variety of items are identical.

So how did it come to this, with two laffa restaurants coexisting practically next door to each other, with only Friedman’s Fresh Fish serving as a buffer between them?

That long and winding road is pockmarked with Dr. Laffa Inc.’s unpaid bills, terminated tenancy agreements, bankruptcy, court proceedings and “he said-she said” explanations as to what really happened.

This much we know: Dr. Laffa Inc. was a company that operated two Middle Eastern-style restaurants, one on Magnetic Drive, in the Steeles Avenue and Dufferin Street area, and the other at 3023 Bathurst St., under the name Dr. Laffa On The Go, along with a kitchen on Magnetic that prepared the food sold in both locations. Yoram Gabay and Sason (Sasi) Haba were the partners behind the venture.

The restaurants proved a success. “We gave good food, good service,” Gabay said.

For a few years, the business was profitable, but in November 2014, Dr. Laffa was petitioned into bankruptcy after one of its main food suppliers, Deluxe Produce Distribution, cited debts outstanding of $180,000.

But this is where things get murky. According to court documents, Dr. Laffa was a profitable business, netting between $300,000 and $400,000 a year. How it came to owe so much is unclear. According to documents filed in court, the partners had brought in Haba’s nephew to manage the Bathurst Street location, and he allegedly stole more than $150,000.

Gabay and Haba got rid of the nephew, and Gabay took over management of the Bathurst location himself.

“We could fix things, because we were busy and we needed patience and we had to put the money back in the business,” Gabay said.

But soon afterward, the partnership dissolved. Court documents state that “prior to the end of March 2014, Haba and Gabay decided to wind up the tenant [Dr. Laffa Inc.] and Dr. Laffa On The Go Inc. Each were to incorporate a new company. Haba’s new corporation was to take over the operation of Dr. Laffa Inc. and the Magnetic Drive restaurant. Gabay’s new corporation was to take over operations of Dr. Laffa On The Go and the restaurant lease and restaurant premises” on Bathurst Street.

Gabay acknowledged that at the time, Dr. Laffa owed creditors substantial sums. An agreement he showed The CJN, dated May 13, 2014, showed total debts of more than $377,000. But he said he and Haba had agreed to split the business assets and the debts. The $180,000 owing to Deluxe was to become Haba’s responsibility, while Gabay paid off a larger number of creditors owed lesser amounts. In the end, the totals were to balance, and Gaby says he has paid off all the creditors, except one, which is still receiving monthly payments.

Then, unbeknownst to Gabay, Dr. Laffa was taken into bankruptcy around the same time his landlord began eviction proceedings against him. That case went to court, and the court accepted the landlord’s request to terminate Dr. Laffa’s lease. The landlord had contended that they had rented to Dr. Laffa Inc., but instead got Dr. Laffa On The Go. In addition, the landlord claimed Dr. Laffa had rented the second floor of the premises at 3023 Bathurst St. to a residential tenant, contrary to the terms of the lease.

Gabay was given until the end of December 2014 to vacate the premises, and to his great fortune, he learned that the tenant of a building two doors north, at 3027 Bathurst St., had pulled out of a lease and the landlord was looking for someone to take the space. So in a single night in December 2014, he moved the entire contents of Dr. Laffa On The Go to the new location.

Gabay said he only learned of the bankruptcy while in court for the tenancy matter, and it surprised him. The agreement requires Haba to pay the debt owed to Deluxe, but he acknowledges he did sign a document put before him by Deluxe to personally guarantee the debts owing to it.

“It was my biggest mistake,” he said, adding he signed because “it was a friendly split-up” and he expected to continue receiving food from Deluxe. Signing would make him feel more “at peace,” he said.

According to Ronen Ifraimov, president of Deluxe, his company took over its secured assets, including the lease at Magnetic, the equipment and the business name. Ifraimov then went on to found and run Famous Laffa. Haba now works for him. (Haba referred all questions to Ifraimov.)

Although Ifraimov is in the wholesale food business (he also grows vegetables commercially in Leamington, Ont.), he decided to take over management of the Magnetic restaurant and kitchen to recover the debts owing him. A franchisee operates Famous Laffa at 3023 Bathurst, Dr. Laffa’s former location, while a third venue on Yonge Street (not kosher), as well as a fourth to be opened in the Promenade Mall, are also franchise operations.

Gabay continues to operate Dr. Laffa On The Go, at 3027 Bathurst St. and has a 10-year lease at the location.

With two laffa joints just metres apart, you might expect Dr. Laffa On The Go’s business to suffer. But Gabay said his customers have remained loyal and his business is as good as it’s ever been.

Ifraimov, too, is happy with the way the business has gone, and he said the franchisee on Bathurst is doing OK, if not great. With a fourth Famous Laffa set to open in the Promenade in September, the company has also advertised for potential franchisees for 10 locations in Toronto and the surrounding region, including Burlington, Oakville and Aurora. Apparently there’s a market for the Laffa restaurants, even if a couple are almost next door to each other.