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March 4, 2021by David Klemt David Klemt No Comments

What’s in the Senate Relief Package?

What’s in the Senate Relief Package?

by David Klemt

As expected, the Senate version of the latest Covid-19 relief bill is different from the one passed by the House.

The changes will require the bill to be kicked back to the House, adding to the pressure to get relief to Americans before March 14.

Things may change but below are some of the differences between the two versions.

$15/hour Minimum Wage

This provision is dead in both houses of Congress.

That should come as no surprise as the boost to federal minimum wage was declared dead in the water by Senate Parliamentarian Elizabeth MacDonough even before the House voted on the American Rescue Plan Act.

According to reports, removing any and all language that raises federal minimum wage to $15 an hour is the biggest change between the House and Senate versions of ARPA.

Direct Payments to Americans

Chatter online indicates that Senate Democrats are in favor of a drastically lower threshold for $1,400 direct stimulus payments.

The House version of the American Rescue Plan Act of 2021 calls for $1,400 economic impact payments with the following parameters:

Individuals earning an adjusted gross income (AGI) up to $75,000.
Married couples earning an AGI up to $150,000.
Payments phase out, reaching $0 for individuals earning AGI over $100,000 and married couples earning AGI over $200,000.

The Senate version calls for $1,400 payments to phase out entirely for individuals earning an AGI of $80,000 and married couples with an AGI of $160,000.

Restaurant Revitalization Fund

Let’s be honest, this is why you’re here. Is the RRF safe?

There’s nothing that shows the $25 billion fund is in danger from the Senate. That said, there’s one threat to ARPA in general, “minor” as it may be: game-playing politicians.

Unsurprisingly, Republicans view ARPA as too expensive, too favorable of Democrat’s priorities, and insufficient for addressing the reopening of businesses, schools, and fighting Covid-19.

Those concerns in and of themselves aren’t akin to playing games, nor are they invalid. Vote-a-rama, however, is a time-wasting stalling tactic that allows senators to propose literally hundreds of amendments to a bill. The time limit for vote-a-rama? There isn’t one—it lasts until senators get tired or bored.

Speaking about a coordinated plan to engage in vote-a-rama, Senator Rand Paul (R-KY), said he’s “hoping for infinity. There are people talking about trying to set up a schedule and having it go on and on.”

Take Action

Americans simply do not have time for politicians on any side of the aisle to play games. Good-faith negotiations are one thing, delay tactics that last for “infinity” are another.

We’re still in the midst of a pandemic, people are unable to pay their bills, they’re going hungry, and business owners and their employees are suffering.

It seems some politicians have made up their minds and are committed to dragging out the process of passing ARPA and the RRF contained within but we still have our voices. Follow this link to tell your representatives to pass ARPA and RRF now.

Enough games, enough delays, more action.

Image: GO Educational Tours from Pixabay

March 1, 2021by David Klemt David Klemt No Comments

Restaurant Revitalization Fund Passes

Restaurant Revitalization Fund Passes

by David Klemt

Congress has once again voted to pass targeted relief for restaurants and bars.

The American Rescue Plan Act of 2021, which includes the Restaurant Revitalization Fund Passes, made it through Congress by a vote of 219 to 212.

All Republicans and two Democrats voted against the $1.9 billion bill, which now goes to the Senate.

Now What?

After a year of being mostly left to fend for ourselves—save for the flawed Paycheck Protection Program—operators may finally receive some relief.

The $300-per-week federal boost to unemployment, which the American Rescue Plan Act increases to $400 per week, expires on March 14. There’s some pressure on the Senate to pass the bill so it can be signed into law before or by that date.

However, we’ve been down this road before: Congress has voted in favor of a bill that contains relief for restaurants, bars and other foodservice and drinking establishments, the Senate goes a different direction, and the Congressional victory turns to ashes in our hands rather than becoming law.

Democrats control the House. A Democrat sits at the Resolute Desk. And while the 50-50 Senate is “controlled” by Democrats since Vice President Kamala Harris can break tie votes, the party can’t afford any defections if they hope to pass the American Rescue Plan.

Once again, targeted relief isn’t a certainty.

What’s in the Plan?

In short, not the RESTAURANTS Act. The American Rescue Plan provides a fraction of the $120 billion for which the industry has been campaigning for a year now.

Instead, a $25 billion grant program called the Restaurant Revitalization Fund (RRF) has been carved out for restaurants, bars and other eligible providers of food and drink.

There’s another $15 billion allocated for targeted Economic Injury Disaster Loan (EIDL) advance payments, and $1.25 billion for shuttered venue operators.

Just $7.25 billion would be pumped into the PPP and the application deadline wouldn’t be extended beyond March 31. This is likely because the PPP has disbursed over $662 billion in just under a year, and there’s still roughly $140 billion available.

In addition, the current bill includes $1,400 direct stimulus payments for individuals earning up to $75,000 or $2,800 for married couples earning up to $150,000. Payments would phase out completely for individuals earning $100,000 or married couples earning $200,000.

What’s the Restaurant Revitalization Fund?

The RRF carves out $25 billion for restaurants, bars, saloons, inns, taverns, lounges, tasting rooms, brewpubs, taprooms, food trucks, food carts, food stands, caterers, and eligible providers of food and/or drink.

Grants, should the bill pass the Senate and be signed into law, will be equal to pandemic-related revenue loss as calculated by subtracting 2020 revenue from 2019 revenue. Eligible entities could receive of up to $10 million, or a physical location could receive a maximum grant of $5 million.

RRF grants are required to be used for:

payroll costs;
principal and interest payments on a mortgage, excluding prepayments on the principal;
rent payments, excluding prepayments;
utilities;
supplies, including personal protective equipment (PPE) and cleaning materials;
F&B expenses within the eligible entity’s scope of “normal business practice” before the covered period: February 15, 2020, through December 31, 2021 (or another date as determined by the Small Business Administration);
maintenance expenses, including construction accommodating outdoor seating and walls, floods, deck surfaces, furniture, fixtures, and equipment;
covered supplier costs;
operational expenses;
paid sick leave; and
any other expenses the SBA determines to be essential to maintaining the eligible entity.

The SBA would be responsible for awarding $20 billion of the $25 billion fund in “an equitable manner to eligible entities of different sizes based on annual gross receipts.” The remaining $5 billion would be set aside, per the bill in its current form, for eligible applicants with 2019 gross receipts of $500,000 or less.

Click here to find your senators and urge them to pass the Restaurant Revitalization Fund.

Image: Jens Junge from Pixabay

January 26, 2021by David Klemt David Klemt No Comments

California’s Restrictive Regional Stay-at-Home Order Rescinded

California’s Restrictive Regional Stay-at-Home Order Rescinded

by David Klemt

Expectation became reality yesterday when Governor Gavin Newsom rescinded California’s highly restrictive regional stay-at-home order.

It had been reported for at least a day prior that Gov. Newsom was expected to do so on January 25.

The order, which choked the life out of restaurants, bars and other businesses, has been in place since the start of December 2020.

As we reported several weeks ago, a group of Orange County operators pushed back against the order shortly after it was imposed. The #OPENSAFE collective released a statement announcing their intention to protest Gov. Newsom’s stay-at-home order by remaining open for in-person dining.

Other states that imposed seemingly arbitrary and illogical orders that crushed restaurants and bars also experienced open defiance from operators. One of the highest-profile protests came from New York City restaurants.

Speaking for the first time in well over a week about California’s efforts to combat Covid-19, Gov. Newsom said, “Everything that should be up is up, everything that should be down is down.”

That’s an interesting claim given California experienced a record number of Covid-19-related deaths on January 21 with 761. During his press conference, the embattled governor claimed he lifted his stay-at-home order due to ICU numbers and not because of the multiple lawsuits filed against him or the current recall campaign.

Rather, Gov. Newsom said that he made his decision based on Covid-19 cases and hospitalizations decreasing while vaccination rates are reportedly trending upward. However, as one source cited, just 26 percent of California’s allotted vaccine doses had been administered as of last week.

The rescinding of the regional stay-at-home order doesn’t mean that businesses can reopen and resume operations as usual. Each of the state’s counties will be color-coded according to California’s “Blueprint for a Safer Economy.” Projections will be set aside for actual transmission rate data.

Tier 4 is color-coded yellow and its Covid-19 transmission risk is labeled “Minimal.” Tier 3 is orange and “Moderate,” where as Tier 2 is red and “Substantial.” Tier 1, which is purple, is labeled “Widespread.”

At the moment, most counties in California are purple.

Restaurants located in a Tier 1 county can offer only outdoor in-person dining. Those in Tier 2 can offer indoor dining but only at 25-percent capacity or 100-person maximum capacity (whichever is lower). Tier 3 bumps capacity to 50 percent or 200 people, and Tier 4 dictates a maximum of 50 percent capacity.

As expected, bars (along with breweries distilleries) that don’t serve food receive much harsher treatment than restaurants. Those located in a county designated purple or red must close. Bars in orange counties can open for outdoor service only, and those in yellow counties can offer indoor service at 50-percent maximum capacity. Bars “where [a] meal is provided” follow restaurant guidelines for the four applicable tiers.

Movie theaters, for context concerning how bars are being treated, are subject to the same guidance as restaurants in California’s blueprint. Such venues aren’t exactly known for providing meals.

Before operators who have chosen to work within California’s guidelines throw their doors open, they need to know two things. One, county officials are permitted to impose their own restrictions. If they choose to do so, those restrictions can be stricter than those that come down from state officials.

Two, for those operators in Los Angeles County, confusion remains regarding outdoor dining. Some interpret the rescinding of the state’s prohibition on outdoor dining as a lifting the ban. However, LA County implemented its own ban before the state did so. That county-issued ban expired on December 16 but outdoor dining was banned under the statewide stay-at-home order.

It may seem cut and dry that the expiration of the county order and the lifting of the state’s ban shifts LA County to Tier 1 restrictions. Operators should make sure they’re clear to resume outdoor service before incurring the costs associated with doing so.

How long California will revert back to the state’s Blueprint for a Safer Economy is anyone’s guess. Operators in several states have found themselves caught in a vicious open-close, open-close vortex. At any rate, 25-percent capacity restrictions will still more than likely make it more cost-effective for some operations to remain closed for indoor service.

Image: Paul Hanaoka on Unsplash

January 13, 2021by David Klemt David Klemt No Comments

The 2021 Restaurant Start-Up Cost Guide & Checklist is Here! Download Today

The 2021 Restaurant Start-Up Cost Guide & Checklist is Here! Download Today

by David Klemt

This guide gives anyone starting a restaurant, bar, brewpub or other F&B venue the best chance for success in 2021.

Hospitality has endured a nearly endless thrashing for almost an entire year. The calendar has ticked over to 2021 but still, the pummeling doesn’t have an end date.

However, the industry has endured and continues to do so. We don’t know when Covid-19 will cease presenting a threat but we know this: there’s no end to the fight in those in the hospitality community.

Veteran and neophyte owners and operators are still going to open new venues in 2021, pandemic be damned. That fact means it’s more crucial than ever before that owners are positioned for success.

The KRG Hospitality 2021 Restaurant Start-Up Cost Guide & Checklist aims to structure the process of opening a restaurant or bar to maximize an owner’s opportunity. The guide contains 2021 start-up costs, renovation costs, scaled costs, an in-depth milestone checklist, and more that will help readers understand the process and keep them on track to go from concept to opening doors as smoothly as possible.

Click here to download the guide and start down the path of restaurant or bar success today.