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Brewpub | KRG Hospitality - Part 64

Brewpub

by David Klemt David Klemt No Comments

5 Books to Read this Month

5 Books to Read this Month

by David Klemt

Flipping through an open book

Spring is traditionally the time when we’re meant to reinvent or otherwise better ourselves. These books can help you do just that.

Some will help you expand or enter this business, others will boost your marketing and social media, and a couple will help you refresh your drink menu.

With restrictions easing and vaccination rates in the United States growing, now’s the time to improve yourself and your business.

Prepare now for pent-up demand for in-person dining and drinking.

Food Truck Business Guide for Beginners

Looking to enter this industry with a food truck or expand your existing business with one? This book is a great place to start.

Food Truck Business Guide for Beginners is a comprehensive guide that covers:

  • common mistakes that lead to food truck failure, and exactly how to avoid them;
  • the most successful ways to secure funding;
  • how to master marketing;
  • best practices for passing health inspections;
  • tackling and mastering marketing for your business;
  • and many more topics.

The Terroir of Whiskey: A Distiller’s Journey Into the Flavor of Place

Dr. Rob Arnold is a plant biochemist and the master distiller at TX Distillery. To say he understands the science of whiskey and terroir is obvious.

What’s less obvious is the direction Dr. Arnold’s book heads into. He takes readers to distilleries in Kentucky, Ireland, Scotland and elsewhere, but he takes things further.

In The Terroir of Whiskey, Dr. Arnold shines a light on plant breeders, local farmers, and distillers bringing back “lost” grains. These same innovators are also attempting to create new grains to further develop terroir.

This book will definitely enhance your whiskey knowledge and engagement with guests.

Rad Cocktails

Yes, this book’s description states that it focuses on the home bartender.

No, that doesn’t mean bartenders, operators, and other hospitality pros can’t learn from it.

Rad Cocktails, in addition to including awesome illustrations, also embodies a growing cocktail trend: simplification. Innovative cocktails don’t have to be complicated or take ten minutes to build.

Beautiful Booze: Stylish Cocktails to Make at Home

Natalie Migliarini, also known as Beautiful Booze, has more than 95,000 followers on Instagram. Her cocktail recipes, photographs and mastery of social media help her stand out in a roiling sea of influencers.

Her first book, Beautiful Booze: Stylish Cocktails to Make at Home, also targets home bartenders…on the surface. This book, creative cocktail recipes, can help elevate anyone’s bartending skills. The beautiful photography will also help inspire anyone to take their social media shooting to the next level.

Hacking the New Normal: Hitting the Reset Button on the Hospitality Industry

Alright, this may seem self-serving. However, I wouldn’t have written the foreword for a book I didn’t believe this book would truly help people.

Millions of hospitality industry professionals’ lives were imperiled at the start of last year. We continue to innovate and adapt to overcome unprecedented challenges.

Hacking the New Normal addresses the need for an industry-wide reset and seeks to guide operators through rebuilding for the long term, and to strengthen the industry moving forward.

Image: Mikołaj on Unsplash 

by David Klemt David Klemt No Comments

Stand Out with Weird Holidays: April

Stand Out with Weird Holidays: April

by David Klemt

Stay Weird neon sign with purple background

Want to stand out from from other restaurants and bars in your area? Then commit to keeping it weird.

Several “holidays” are set against every date on the calendar. They range from mainstream to food focused to weird.

Focus on the latter to raise eyebrows, carve out a niche for your restaurant or bar, and attract more guests.

Of course, you shouldn’t try to celebrate every holiday, weird or otherwise. Focus on the days that are authentic to your brand; resonate with your guests; and help you grab attention on social media.

April 14: National Reach as High as You Can Day

This is a holiday that will likely work best on social media. Just like there’s always a holiday and people like to say “there’s always a tweet,” there’s always a hashtag.

Use this day (and its accompanying hashtag) to highlight staff who want to participate, along with your venue.

Of course, if you want to involve your guests in person, go for it. Put your head together with your staff and get creative.

April 15: National Take a Wild Guess Day

You can take promotions centered around this day in several directions. The simplest way is to use the holiday to engage with followers on your social channels.

Consider borrowing from the “wrong answers only” posts on Instagram. Post a blurred, pixelated or “censored” item, like a bottle. In the caption, ask followers to “guess” what it is—wild guesses only.

This holiday also works well with blind tasting events.

April 16: Wear Pajamas to Work Day

I’d say this holiday is fairly self-explanatory. Let your front-of-house staff participate by wearing pajamas, with full team buy-in. Or, encourage your guests to wear their pajamas to your restaurant or bar.

If this holiday fell on a Saturday or Sunday, this would be a great day for a brunch promo. Of course, there’s nothing to say you can’t execute a Friday brunch.

April 16: National Bean Counter Day

In the United States, this holiday is taking place a month before the Tax Day deadline. If you’re so inclined, you could offer a deal to all the tax preparers and accountants in your area.

Although, you can also go a completely different direction. You can fill a large jar with beans—coffee would be great—and have guests guess how many there are. You can even post the jar full of beans to social, encouraging follower engagement. Closest guess wins a prize.

April 22: National Jelly Bean Day

Oh, hey… Remember that bean-counting holiday from way up there? I wonder if that bean-guessing idea would work for this holiday…

April 23: National Talk Like Shakespeare Day

If you think you or your social media manager can handle it, encourage your followers to describe your restaurant or bar as though they’re the Bard himself.

Or, as a Shakespearean translator would explain it, “Encourageth thy followeth’rs to describeth thy restaurant ‘r bar as though those gents’re the Bard himself.”

April 25: National DNA Day

Yesterday, I shared how our DNA plays a significant role in how we perceive bitter flavors. National DNA Day would be a great time to plan and execute a PTC strip and cocktail event.

April 27: National Tell a Story Day

How well do your loyal guests know you and your brand? How well do they know your staff?

National Tell a Story Day is an excellent time to leverage the story features on your social channels. Show off the venue and tell your brand’s story. If you have team members who want to participate and tell share a story, that’s a great way to engage with followers and guests.

April 28: National Superhero Day

If there was a ever a day to encourage your staff and/or guests to dress up for a fun time… National Superhero Day also leverages Shudder’s “Halfway to Halloween” event.

To take this holiday in another direction, you can also celebrate members of your community who give back to others by giving back to them.

“Weird” holidays aren’t just a dynamic way to engage with guests. Asking your team for ideas for holiday promotions is an excellent way to keep them engaged, which is a smart way to retain staff.

Image: Dan Parlante on Unsplash 

by David Klemt David Klemt No Comments

2020 Craft Brewing Production Infographic

2020 Craft Brewing Production Infographic

by David Klemt

Stack of beer kegs in black and white

The Brewers Association‘s latest report and infographic reveal 2020 small and independent craft brewery production numbers.

Like their restaurant, bar and brewpub cohorts, brewers are facing enduring struggles due to the Covid-19 pandemic.

However, the Brewers Association did find some good news.

First, the challenges.

Overall Market Drop

The BA’s report reveals that small and independent craft brewer production is down nine percent from 2019. Overall, draught beer sales dropped 40 percent last year.

That equates to an overall market share of 12.3 percent in 2020. Comparing 2020 to 2019, that’s a decline of 1.3 percent.

Unfortunately, 2020 craft brewer numbers also reveal significant job loss for the industry. In comparison to 2019, direct craft beer jobs are down 14 percent.

In terms of small and independent brewery closures, 2020 saw 346 brewers close their doors permanently.

Some Silver Linings

There is some good news for craft beer. Not every closure is attributable to Covid-19.

Reviewing the 2020 numbers, the BA says there are 8,764 craft breweries operating in the United States. That’s an all-time high.

The breakdown is as follows:

  • 220 Regional craft breweries
  • 1,854 Microbreweries
  • 3,219 Brewpubs
  • 3,471 Taproom breweries

Impressively, the number of new craft brewery openings more than double the number of closures at 716.

Per Bart Watson, chief economist at the BA, the total number of craft breweries and openings in 2020 proves the “resilient and entrepreneurial nature” of small and independent brewers.

BA Infographic

You’ll find more information below. The BA’s infographic neatly tells the story of the association’s latest report.

Perhaps the biggest positive takeaway is the steady growth in operational craft breweries. Since 2016, the number of breweries in this category has increased by nearly 3,100.

That’s an average of 785 new brewery openings each year. Given the number of openings in 2020, it’s possible craft brewers will gain ground on the jobs lost over the course of last year.

It’s also likely production and sales numbers will see a boost in 2021 through a culmination of easing restrictions, reopening markets, pent-up demand, vaccination rates, and guest comfort levels.

2020 Small and Independent US Craft Brewer Annual Production Report

Infographic: Brewers Association

Image: Hennie Stander on Unsplash

by David Klemt David Klemt No Comments

This Would Be a Good Time for a Beer

This Would Be a Good Time for a Beer

by David Klemt

Draft beer on bar

New Beer’s Eve and National Beer Day are relatively new American holidays closely related to prohibition and Repeal Day.

I’m sure you’re thinking, “Wait a second—Repeal Day takes place in December. What’s wrong with you?”

First, you’re right. Second, we don’t have time to get into all of that.

However, beer became legal again well before the Eighteenth Amendment was repealed.

The Cullen–Harrison Act

It’s 1933 and a United States Senator and a Congressman sponsor a bill changing the definition of “intoxicating beverage.”

The bill is aptly known as the Cullen-Harrison Act. It doesn’t legalize all beer but it makes it legal to sell beer with alcohol content no greater than 3.2 percent.

Such alcohol content, it’s thought, is so low as to not be intoxicating.

Congress enacts the so-called Beer Permit Act on March 21, 1933. President Franklin D. Roosevelt signs the act into law the next day, and it goes into effect April 7, 1933.

President Roosevelt, signing the Cullen-Harrison Act, famously says, “I think this would be a good time for a beer.”

National Impact

Beer drinkers—and very likely people just looking for a legal drink—rejoice, obviously.

Across the United States, people gather in droves outside breweries. According to reports, people will consume 1.5 million barrels of beer the day the Cullen-Harrison Act becomes the law of the land.

Fast forward to 2009. Justin Smith, who lives in Richmond, Virginia, at the time celebrates the first National Beer Day. Smith sets off a chain of events involving social media and Untappd. In 2017, Virginia officially recognizes National Beer Day.

Let’s Celebrate!

National Beer Day is accompanied by New Beer’s Eve.

The latter celebrates those brave and thirsty souls that lined up outside our nation’s breweries the day before the Cullen-Harrison Act went into effect.

We get to celebrate two beer holidays this week: New Beer’s Eve on Tuesday and National Beer Day on Wednesday.

New Beer’s Eve is an excellent day for operators to showcase their newest beers.

Both days are ideal for highlighting 0.0 and 0.5 beers, along with what we now refer to as “session” beers (5.0 percent and lower).

Oh, and don’t forget to use President Roosevelt’s famous quote when promoting these two holidays: “I think this would be a good time for a beer.”

Image: cottonbro from Pexels

by David Klemt David Klemt No Comments

The 5 Ds of Bystander Intervention

The 5 Ds of Bystander Intervention

by David Klemt

Busy bar in black and white

One non-negotiable for operating a restaurant, bar, nightclub or other hospitality venue is ensuring the safety of guests.

Harassing, threatening and violent behavior cannot be tolerated, period. Some venues employ trained and certified security tasked with keeping patrons safe.

However, not every business in this industry, restaurants for example, employ or retain security personnel. There are online and in-person security courses that owners, managers and staff can complete, and I encourage operators to look into doing so. Some courses can not only empower participants, they can result in the lowering of insurance premiums they’re considered so effective.

Additionally, it’s wise to study conflict resolution and de-escalation. Both are valuable skills in hospitality and other areas of our lives.

In the meantime, a global movement called Hollaback! has come up with the Five Ds of Bystander Intervention. These began as the Three Ds by Green Dot in the early 2000s. In 2015, they became the Four Ds. In 2017, a fifth “D” was introduced.

You’ll find the Five Ds below. Not every step works perfectly on the operations side but they’re still helpful. Doing nothing is simply not an option.

Distract

Per Hollaback!, distraction is a subtle and creative way to intervene, and the goal is “to derail the incident by interrupting it.” The witness employing distraction engages the victim of harassment directly, ignoring the harasser. Hollaback! provides the following examples of distraction:

  • Pretend to be lost. Ask for the time. Pretend you know the person being harassed. Talk to them about something random and take attention off of the harasser.
  • Get in the way. Continue what you were doing, but get between the harasser and the target.
  • Accidentally-on-purpose spill your coffee, the change in your wallet, or make a commotion.

It’s important to note that staff will need to read the situation if they witness harassment. Also, some of the above examples don’t really work in a hospitality setting, but you understand the idea.

Delegate

Delegation is simply asking for assistance or help. In many cases, if a staff member is witnessing harassment they’ll have a manager on duty on which they can rely for assistance.

Conversely, a manager can delegate to a staff member to employ the distract technique. In this situation, the staff member engages the victim of harassment and asks if they want them to call law enforcement. The manager can also direct a staff member to call law enforcement.

However, as Hollaback! notes, “a history of being mistreated by law enforcement has led to fear and mistrust of police interventions,” so the victim may not want to involve police. However, the venue must also protect themselves, so it may be necessary to involve law enforcement for documentation and other purposes.

Document

Along with protecting the victim and putting a stop to harassment, documentation is a crucial step.

All hospitality venues should be set up to complete incident reports. This protects victims (and therefore other guests and the community) and the business.

Hollaback! instructs a bystander to assess the situation first. If another bystander is already intervening, the witness must assess their own safety. Record the incident only if safe to do so.

Anyone who records the incident should ask the victim what to do with the recording. Don’t post it online—this is a traumatic experience and doing so is a violation in and of itself.

Delay

As Hollaback! explains, many incidents of harassment take place very quickly. It’s possible the incident will be over before a bystander can distract, delegate or document the harassment.

In a restaurant, bar or other hospitality setting, the harasser may exit the venue immediately, before staff can step in. That doesn’t mean everything is back to “normal.”

Hollaback! suggests engaging the victim in the following ways:

  • Ask them if they’re okay and tell them you’re sorry that happened to them.
  • Ask them if there’s any way you can support them.
  • Offer to accompany them to their destination or sit with them for awhile.
  • Share resources with them and offer to help them make a report if they want to.
  • If you’ve documented the incident, ask them if they want you to send it to them.

Direct

More than likely—and unfortunately—this is the step most familiar to bartenders, servers and other front-of-house staff.

Direct means to confront the harasser directly. Of course, this is the riskiest step.

Hollaback! suggests assessing the situation to ensure the bystander is safe physically; the victim is safe physically; the victim wants someone to intervene; and the situation may be unlikely to escalate if they confront the harasser.

Again, operators will have to come up with a plan for addressing harassment, threats and violence. Staff must be aware of policies and what’s expected of them, and they should feel comfortable sharing their thoughts on policies.

Incidents can happen at any type of venue in any location at any time. Doing nothing, however, is unacceptable.

Disclaimer

This content is for informational purposes only, and should not be used as legal or other advice. This article does not constitute professional advice, nor does any information constitute a comprehensive or complete statement of the matters discussed, the law, or liability. This information is of a general nature and does not address the circumstances of a specific individual or entity. The reader of this information alone assumes the sole responsibility of evaluating the merits and risks associated with the use of any information before making any decisions based on such information.

Image: Pixabay

by David Klemt David Klemt No Comments

Meet Customers Where They Are, Part 2

Meet Customers Where They Are, Part 2

by David Klemt

Preparing a cocktail at home for living room tasting event

We seem to approaching a semblance of normalcy but some consumer behaviors—drinking at home among them—are likely here to stay.

Per Distill Ventures, the living room is the new tasting room.

Consumers are drinking at home, drinking during the day, and prioritizing convenience.

So, will you get creative and meet your customers where they are—their living rooms?

The New Tasting Room

Fresh off their third whisky summit, Distill Ventures believes consumers will seek out more at-home experiences.

This is partly due to some regions around the world locking down. Additionally, consumers know they can partake in experiential guests at home.

Consider what some brands are putting together to engage with people at their homes:

  • Cynar: CynArts & Crafts, Paint by Numbers Virtual Party, complete with brushes and paints sent to participants.
  • Campari: Decoding the Science of Bitter, including a PTC strip sent to participants to gauge their bitter response.
  • Espolòn Tequila: Virtual Espolotería, an online bingo-style game.

Distill Ventures and the panelists of their third summit see people’s living rooms as a viable place to engage consumers.

While the latest summit focuses specifically on whisky distillers, brand marketers and retailers, the findings are transferrable.

Don’t Be Left Out

If consumers are going to engage more with brands at home, operators must meet them in their living rooms. That means going beyond offering standard delivery.

Obviously, operators need to attract guests to their brick-and-mortar locations. And pent-up demand for in-person experiences is set to explode.

However, that initial explosion in traffic will eventually taper off, and more quickly than we think. That gradual slow-down will make digital engagement crucial.

This industry requires adaptability and agility to survive and thrive. Operators and their teams will need to focus on social, YouTube and webinar-style engagement to engage with current and new customers.

Bar team members who want to participate can share recipes and techniques via live videos. Of course, kitchen team members can do the same.

Scheduling digital events—guided tastings and cooking classes—can also draw customers. Operators should just make sure they don’t give too much away to their audience so they’ll feel compelled to visit in person as often as they can.

Succeeding with these events opens the door to potentially lucrative collaborations. Operators should reach out to brand partners for branded, themed events.

With enough lead time, packages can be put together and delivered with partner help. Of course, in “help” in this context means “dollars and/or product.”

You’ll never know what support your partners are willing to provide if you don’t ask.

Image: Boozy Events on Unsplash 

by David Klemt David Klemt No Comments

PPP 2nd Draw vs ERTC vs RRF: What to Know

PPP 2nd Draw vs ERTC vs RRF: What to Know

by David Klemt

The face on a bank note

Some regions, states and people are behaving like the pandemic is over but our industry is still in crisis.

There is good news in the form of a few resources business owners can utilize.

Let’s take a look at the the Employee Retention Tax Credit, second Paycheck Protection Program draw, and Restaurant Revitalization Fund.

Paycheck Protection Program

Today is your last day to apply for the second PPP draw. That’s why we’re starting here and why, if you haven’t yet, you need to apply now.

According to the Small Business Administration, a borrower is (generally speaking) eligible if they:

  • previously received a first-draw PPP loan and will use (or has used) the full amount only for authorized uses;
  • have no more than 300 employees; and
  • are able to demonstrate at least a 25-percent reduction in gross receipts between comparable quarters in 2019 and 2020.

Applicants seeking a second draw need to know the following:

  • No extension date has been announced for the second PPP draw.
  • Each single borrower is limited to a $2 million loan.
  • Using the first draw as a model, the average loan size may be around $128,000.
  • The terms of second-draw PPP loans are the same regardless of who is borrowing and who is lending.

Use SBA Lender Match to find a lender today.

Employee Retention Tax Credit

When it comes to relief for this industry, much of the focus is on the PPP and RRF.

However, the ERTC can be a valuable resource for eligible restaurants.

First, what’s the ERTC? It’s a payroll tax credit—fully refundable—meant to persuade employers to keep and compensate their workers when they’re not fully operational.

Second, who’s eligible? To claim ERTC for a given calendar quarter, restaurant operators must show:

  • full or partial suspension as a result of orders from a governmental authority limiting commerce, travel or group meetings due to Covid-19; or
  • they experienced a significant decline in gross receipts during the calendar quarter when compared to 2019.

The above criteria apply to the quarter an operator is applying for the ERTC.

To better understand the ERTC, we’re including an example from the National Restaurant Association:

Henry’s Hotcakes (HH) received a $120,000 PPP loan in April 2020. These funds were fully spent on its 10 employees by September 20, 2020. Previously, HH would not have qualified for ERTC. However, HH can now reach back to its wages for the fourth quarter of 2020 (OCTDEC) and obtain up to $5,000 per eligible employee (50% credit of up to $10,000 in eligible wages) in ERTC.

Click here to read more about the ERTC on the IRS website.

Restaurant Revitalization Fund

The Restaurant Revitalization Fund is the most recent relief resource to come to fruition, so it stands to reason that it’s top of mind for most operators.

According to recent reporting, the SBA—the agency responsible for overseeing the RRF—is aiming for early April to launch the fund.

Here’s what restaurant and bar operators need to know now:

  • A grant is equal to the amount of a restaurant’s pandemic-related revenue losses.
  • Grants are tax-free.
  • To calculate a grant amount, subtract 2020 gross receipts from 2019 gross receipts. Operations must deduct first-draw PPP and second-draw PPP loans, even if they’re paid back or forgiven.
  • Any economic disaster loans—Economic Injury Disaster Loans, for example—are not RRF deductions.
  • Per the SBA, operators do not need to register for a System for Award Management (SAM.gov) account, meaning they no longer need to acquire a DUNS number.

The following are eligible RRF expenses:

  • broad operational expenses;
  • payroll, rent, and mortgage interest;
  • “normal” food and beverage inventory;
  • various supply purchases (PPE, for example);
  • property damage costs related to public disturbances in 2020;
  • debt obligations to suppliers before covered period;
  • interest payments on any other debt obligations incurred prior to Feb 15, 2020; and
  • refinancing EIDL.

Bear in mind that when it comes to the PPP, ERTC and RRF, changes in requirements and other processes are subject to change. Operators must stay up to date on these and other programs.

Disclaimer

This content is for informational purposes only, and should not be used as legal, tax, investment, financial, or other advice. This article does not constitute professional and/or financial advice, nor does any information constitute a comprehensive or complete statement of the matters discussed or the law. This information is of a general nature and does not address the circumstances of a specific individual or entity. The reader of this information alone assumes the sole responsibility of evaluating the merits and risks associated with the use of any information before making any decisions based on such information.

Image: Freddie Collins on Unsplash

by David Klemt David Klemt No Comments

Restaurant or Bar Dream? Make Your Move

Restaurant or Bar Dream? Make Your Move

by David Klemt

Chess pieces on a chessboard

If your dream is to open a restaurant, bar or nightclub, you’re not doing yourself any favors by waiting to make it a reality.

The same goes for starting up any other type of hospitality business.

We’re in uncharted territory and things seem unstable. But waiting to move forward with your concept is setting you back.

Industry Challenges

We can all agree that the destruction wrought upon the hospitality industry in 2020 continues to be felt today.

Tens of thousands of business closures. Millions of jobs and hundreds of billions of dollars in revenue lost.

Some experts say the veteran operators and workers won’t be back. The financial damage and psychological trauma will drive them out of the industry. Others disagree, myself included, saying those operators won’t stay down for long. This industry works its way into people’s blood.

The pandemic is responsible for the permanent or long-term closure of nearly 20 percent of restaurants in America. Most of the restaurants lost were well-established operations. The industry is down 2.5 million jobs that it will take years to recover.

Since March of last year, Canada has seen the closure of 10,000 restaurants. The country is facing the loss of 800,000 industry jobs.

Waiting to open a restaurant or bar, therefore, seems to make sense. Only no, it doesn’t.

Don’t Wait

Time is rarely on anyone’s side. And I’m not the first to say that perfection is an illusion. Our industry would be a fraction of what it is if people chose to wait for the “perfect time” to open.

That doesn’t mean it’s great to throw caution—and hundreds of thousands of dollars—to the wind.

Rather, those with a vision for a business in this industry owe it to themselves to move forward.

Let me put it this way: If you have an idea but you’re waiting for “the right time,” you’re already behind.

Forward Progress

The key is being strategic, making calculated decisions.

There are operators who successfully opened new concepts in the midst of the pandemic. We’re going to see new entrants in this industry this year as well. Will you be among them?

Maybe you’re not ready to break ground or sign a lease. Perhaps you’re not ready to send in a crew to renovate a space.

However, there are crucial moves you can make so that when you’re ready ready, you can move quickly. Think agility.

Will you be applying for a grant to fund part of your business? Complete the paperwork and submit it now.

Do you need a consultant? Do your research now and schedule those conversations.

You need demographic, feasibility and other studies done. Will you do them? Will you retain the services of an industry researcher?

If you’re not yet ready, take meaningful steps today because your future competitors are making their moves. It takes longer than you think for each crucial step to be completed, and there are dozens.

Your concept won’t become a reality if it only lives in your head. Don’t watch your opportunity to thrive in this industry pass you by.

Image: Kei Scampa from Pexels

by krghospitality krghospitality No Comments

House Passes $1.9B Covid Relief Bill, RRF

House Passes $1.9B Covid Relief Bill, RRF

by David Klemt

US Capitol Building Dome

The Senate version of the American Rescue Plan Act of 2021 is through the House, awaiting the signature of President Joe Biden.

Once the bill is signed by the president, it will be the law of the land.

That means our industry is finally receiving at least a portion of the relief it so desperately needs. After nearly a year of campaigning and fighting, the Restaurant Revitalization Fund (RRF) is a reality.

Restaurant Revitalization Fund

Managed by the Small Business Administration properly, the RRF is a critical lifeline for small- and mid-sized operators.

The SBA will prioritize women- and veteran-owned and operated businesses for the first 21 days. Economically and socially disadvantaged businesses will also receive priority.

Maximum grant amounts are $5 million per individual restaurant or $10 million per restaurant group.

Eligible Expenses

Importantly, eligible expenses fall between February 15, 2020 through December 31, 2021.

Eligible expenses include but are not limited to:

  • payroll and benefits;
  • mortgage (no prepayment);
  • rent (no prepayment);
  • utilities, maintenance;
  • supplies (including PPE and cleaning materials);
  • food;
  • operational expenses;
  • covered supplier costs (as defined by the SBA under the PPP program); and
  • sick leave.

American Rescue Plan Provisions

Of course, the RRF is just a small portion of the American Rescue Plan. The bill includes many provisions for national Covid-19 testing and vaccine distribution.

States and local governments receive $20 billion to assist low-income households with rent, utility bills, and back rent. There’s an increase to benefits of 15 percent through September for those on food stamps.

Also, the Emergency Injury Disaster Loan (EIDL) program receives $15 billion, which will help small business owners.

The $300-per-week federal boost to unemployment benefits remains the same rather than climbing to $400 per week.

Crucially, the bill waives the first $10,200 of unemployment benefits from 2020. That amount rises to $20,400 for married couples. To receive the waiver, a household must have an adjusted gross income of $150,000. That AGI is the same for individual and combined households.

Individuals with an AGI of up to $75,000 will receive stimulus payments of $1,400. That amount phases out completely at $80,000 for individuals, $160,000 for couples.

What’s Next

The SBA is responsible creating and implementing the RRF application process.

For now, it’s wise for operators to calculate their grant amounts:

  • Open prior to 2019: 2019 revenue minus 2020 revenue minus PPP loans.
  • 2019 opening: Average of 2019 monthly revenues times 12 minus 2020 revenues.
  • 2020 opening: Eligible to receive funding equal to eligible expenses incurred.

Since the SBA is the agency overseeing the $28.5 billion RRF, it’s a good idea to monitor their site for pertinent dates, details and requirements.

Image: Joshua Sukoff on Unsplash

by David Klemt David Klemt No Comments

Senate Boosts RRF to $28.6 Billion

Senate Boosts RRF to $28.6 Billion

by David Klemt

Lower-case neon open sign

On Saturday, the Senate approved their version of the $1.9 trillion Covid-19 relief bill along party lines.

Next, the bill will go back to the House and could receive a vote as early as tomorrow.

Boost to RRF?

According to several sources, the Senate’s version of the American Restaurant Plan Act (ARPA) includes a $3.6 billion boost to the $25 billionRestaurant Revitalization Fund (RRF).

If that’s accurate and the House passes this version of the ARPA, the RRF has $28.6 billion to disburse.

Five billion dollars will be set aside specifically for businesses that grossed less than $500,000 in receipts in 2019.

Mostly a Good Start?

The RRF is modeled on the RESTAURANTS Act.

Unfortunately, it isn’t funded like the RESTAURANTS Act. The industry has been campaigning for nearly a year for a $120 billion fund.

More than 110,000 restaurants and bars have been lost throughout the United States permanently. In addition, the industry has lost around $220 billion in sales.

The RRF isn’t even a quarter of what the industry was asking for in terms of help from elected officials.

Still, if managed properly, the RRF is much-appreciated and much-needed relief for small and mid-sized operators.

The Details (So Far)

The Small Business Association (SBA) will manage the RRF. For the first 21 days, businesses owned or controlled by women or veterans—or that are economically and socially disadvantaged—will be prioritized for grants.

Maximum amounts for grants are $5 million per individual restaurant or $10 million per restaurant group.

Established restaurants can calculate their grants thusly: 2019 revenue minus 2020 revenue minus PPP loans. For restaurants that were opened in 2019, the calculation is the average of 2019 monthly revenues times 12 minus 2020 revenues. Restaurants opened in 2020 are eligible to receive funding equal to eligible expenses incurred.

Grants can be spent on eligible expenses from February 15, 2020 through December 31, 2021. However, the SBA may extend that period through two years from enactment.

Eligible expenses include but are not limited to:

  • payroll and benefits;
  • mortgage (no prepayment);
  • rent (no prepayment);
  • utilities, maintenance;
  • supplies (including PPE and cleaning materials);
  • food;
  • operational expenses;
  • covered supplier costs (as defined by the SBA under the PPP program); and
  • sick leave.

The fight for relief isn’t over. Please click here to tell your representatives to pass ARPA and the RRF immediately.

Image: Finn Hackshaw on Unsplash

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