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March 31, 2021by 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

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

March 10, 2021by krghospitality krghospitality No Comments

House Passes $1.9B Covid Relief Bill, RRF

House Passes $1.9B Covid Relief Bill, RRF

by David Klemt

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

March 9, 2021by David Klemt David Klemt No Comments

CDC Updates Mask, Gathering Guidance

CDC Updates Mask, Gathering Guidance

by David Klemt

On the heels of some states rescinding mask mandates, the Centers for Disease Control updates safety guidelines.

The CDC’s guidance focuses on vaccinated people.

Key Changes

Per the CDC, people who are vaccinated can meet indoors with one another. These indoor meetings can take place without masks.

Of particular note, the CDC says these people can meet up indoors with one unvaccinated household as long as they’re at “low risk” of serious illness.

Equally interesting, the latest guidance claims that if a fully vaccinated person is exposed to someone with Covid-19, they don’t need to quarantine if they’re not showing symptoms.

Importantly, these guidelines address fully vaccinated people, not those awaiting their second shot.

Masks & Public Gatherings

The CDC still recommends masks, social distancing, avoiding crowds, and staying away from spaces with poor ventilation.

Those who are fully vaccinated should exercise those recommendations whenever they’re in public; gathering with people are unvaccinated from more than a single household; meeting with anyone with increased risk of severe illness or death should they be infected with Covid-19.

Vaccinated or not, the CDC recommends people avoid medium- or large-sized gatherings and domestic and international travel.

Workplaces should still follow CDC guidance for employees not working exclusively from home.

Important Details

The CDC says a person is “fully vaccinated” if they meet one of two criteria:

It has been two weeks since they’ve received their second dose of a two-dose Covid-19 vaccination (Moderna, Pfizer, for example).
It has been two weeks since they’ve received a single-dose vaccine (example: Johnson & Johnson).

Anyone who needs to receive a second shot isn’t fully vaccinated. The same holds true if it has been less than two weeks since being vaccinated.

Per the CDC webpage: Everyone, “even people who’ve had their vaccines—should continue taking basic prevention steps when recommended.”

Click here to review the CDC’s new guidance. Remember that health and safety protect yourself, your staff, your guests and your community.

Image: torstensimon from Pixabay

March 8, 2021by David Klemt David Klemt No Comments

Senate Boosts RRF to $28.6 Billion

Senate Boosts RRF to $28.6 Billion

by David Klemt

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

March 5, 2021by David Klemt David Klemt No Comments

Some Texas Operators Keep Masks in Place

Some Texas Operators Keep Masks in Place

by David Klemt

Texas is less than a week away from opening “100 percent” according to Governor Greg Abbott.

Three things in life are certain: death, taxes, and Texans aren’t fans of being told what to do.

Data shows an increase in coronavirus cases in Texas but that isn’t stopping Gov. Abbott from announcing all businesses can open at 100-percent capacity and the state’s mask mandate is no more as of March 10.

Political, Practical or Perilous?

Per Gov. Abbott, Texas have “mastered the daily habits to avoid getting Covid,” so it’s “now time to open Texas 100 percent.”

One of those habits, one would assume, is wearing a mask or other face covering to “avoid getting Covid,”

Doctors and health experts have been warning against complacency fueled by vaccines and cases dropping in some states. Another surge may be around the corner if people drop covid-19 safety measures in favor of a return to “normal” life.

Gov. Abbott’s announcement, therefore, calls into question his motivations: political, practical or perilous?

Some Operators Pushing Back

If we accept that one can’t tell a Texan what to do, we must apply that to restaurant and bar operators in the state.

Some Texas operators disagree with Gov. Abbott lifting of the mask mandate and are “100 percent” still requiring masks in their establishments post-March 10.

This message from Bobby Heugel, the operator behind Anvil Bar & Refuge, Tongue-Cut Sparrow, Better Luck Tomorrow and Squable in Houston, is straightforward. It’s also garnering plenty of support, with people thanking Heugel and pledging to spend their money at his businesses.

In response to a question by one commenter on the post, Heugel explains that the hospitality group is maintaining 50-percent capacity, socially distanced seating, and other CDC guidelines “until vaccination rates improve.”

Nickel City operations locations in Austin and Forth Worth. As the above statement makes clear, guests must wear masks inside their venues regardless of what Gov. Abbott says. Like Heugel’s, Nickel City’s statement is garnering support.

Whether the governor’s move proves wise or foolish will bear out in the coming weeks. However, the decision will likely once again put front-of-house workers at risk of hostile confrontations with guests who take wearing a mask as a personal attack on their liberty.

Still Struggling

To be fair, Gov. Abbott isn’t going it alone in terms of rolling back a mask mandate. Mississippi, Alabama, Iowa and Montana have made similar choices.

Going a further step toward fairness, a total of 16 states don’t have mask mandates in place. In fact, some never did. What has drawn attention is that Texas is the largest state to do away with its mask mandate (and the second largest state in the US in terms of population and area).

What grabbed my attention are the responses from well-known and respected operators who have chosen to still require masks and other Covid-19-related health and safety guidelines, along with the support they’re receiving from the public for doing so.

Multiple vaccines, a seemingly downward trend in infection rates, and the lifting of restrictions don’t magically solve operators’ problems—they’re struggling, as are their employees.

Follow this link to tell your representatives to pass the American Rescue Plan Act of 2021 and Restaurant Revitalization Fund now.

Image: Adam Nieścioruk on Unsplash

United States Capitol Building rotunda ceiling painting

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 3, 2021by David Klemt David Klemt No Comments

Meet Customers Where They Are

Meet Customers Where They Are

by David Klemt

If news stories are to be believed, Americans are fleeing big, expensive cities en masse.

Are those stories accurate or examples of sensationalism?

Mass Exodus?

The pandemic is, without any doubt, reshaping the United States. It is, in fact, transforming any nation on which it has gained a significant foothold.

Several sources claim that a mass exodus to the suburbs and rural towns is taking shape across America.

The authors of these stories often cite survey results, housing and rental price fluctuations, financial struggles and the cost of living in many cities, and anecdotal “evidence” to make their points.

On its face, just the argument that cities like Los Angeles and New York City are too expensive to live in with so many people struggling financially makes sense. And stories about astronomically high rent compared to square footage and median income in dense, expensive cities are commonplace.

Haute Exodus?

Still other stories tell tales of the wealthy migrating from major cities to “wait out” the pandemic.

Since wealthy people have the means, they’re able to leave densely populated areas for destinations with smaller populations. The logic being, the less people in an area, the lower risk of infection.

There are reports referring to NYC as a “ghost town” and describing San Francisco as a shell of its former densely-populated, well-heeled self.

Again, much of the reporting is supported by anecdotal and social media “evidence.”

Half-thruths

Forbes, which has published articles supporting mass exodus claims and also disputing them, has made the argument that the situation is nuanced.

Eric Martel, a Forbes Councils Member, analyzed U-Haul Migration Index (UMI) and uncovered some interesting data. Martel finds that net migration in San Francisco and Los Angeles is lower—significantly so in LA—than it was in 2018. In NYC, net migration looks higher.

More reasonable conclusions regarding Americans and the pandemic seem to be:

Large numbers of people have moved out of some major cities. NYC seems to be a good example.
Some of the wealthy have temporarily left highly-populated cities, choosing to stay in places normally considered vacation destinations for longer periods of time.
People appear to be moving toward the outskirts of larger cities where rent and prices tend to be lower than that of city centers.
Suburbs near the outskirts of major cities appear to be popular migration targets.
Some of this “migration” is temporary, driven by the ability to work remotely. It’s likely that some people who have moved out of cities will return when they perceive things have returned to “normal.”

Adapt

Jack Li, co-founder and CEO of Datassential, suggests operators check out so-called second-tier cities—Austin, Nashville and Charlotte, for example—and the areas where cities meet suburbs. The reasons are simple:

Innovation and food trends tend to start cities, reaching rural areas last. That means second-tier cities, city outskirts, and suburbs are quicker to embrace trends and innovations. (Location.)
Less-expensive commercial real estate prices. (Cost.)
Potential increase in the number of families. (Customer density.)
Potential increase in the number of seniors with financial means. (Customer density.)

The impact the pandemic has had makes informed decisions that much more critical to success in this industry. Demographic and feasibility studies are more important now than ever.

Both are cornerstones of the KRG Hospitality approach, whether an operator has several years’ experience or is a neophyte. Click here to learn more about how KRG Hospitality can help you and your concept, click here to learn about KRG Mindset Coaching, and click here to download the KRG 2021 Start-up Cost Guide & Checklist.

Image: The Lazy Artist Gallery from Pexels

Cocktail with large king ice cube, overhead view

March 2, 2021by David Klemt David Klemt No Comments

Your Drink Menu Deserves an Ice Program

Your Drink Menu Deserves an Ice Program

by David Klemt

All ice is not created equal—there’s a reason behind their shapes and sizes.

Taking the time to consider your ice and build a dedicated program that includes it is crucial for your beverage program and the guest experience.

Remember that just like there are rules for building cocktails, there are rules for using ice:

Dilution is your friend. Water is a crucial component for cocktails.
Is your ice floating? Your build balance is off.
Store ice in plastic bags if it’s not being used right away.
Don’t use ice that’s two weeks old or older.

Types of Ice

Standard Cube (1 inch x 1 inch): These absolutely have a place in the cocktail glass. Just adhere to this standard when using standard ice cubes: Never use a water source you wouldn’t drink.

King Cubes (2 inches x 2 inches): Use these for spirit-forward drinks for consistent temperature and dilution. Examples: Manhattan, Negroni, Old Fashioned, Vieux Carré.

Collins Spear/Shard/Cylinder: For highballs. These make a Tom Collins or G&T look elegant and cool.

Ice Block: Use blocks in punches to keep large-format cocktails cold and control dilution over time.

Ice Slab: These are impressive blocks of ice bars and restaurants use to cut and shape their own cubes and spheres, often providing guests with entertainment (see below). Operators either form slabs in-house or retain the services of producers who drop them off. (In fact, there are services out there that will provide perfect and bespoke cubes, spheres and spheres.)

Sphere: Ice spheres are ideal for stirred cocktails and enjoying spirits straight. They melt very slowly in comparison to other shapes and deliver an impressive visual impact, so they often wind up in cocktails that call for king cubes.

Pebble/Crushed: Use in drinks that are heavy on syrup and/or juice, tiki drinks, and drinks served in hot climates. Examples: Frozen Daiquiri, Margarita, Mint Julep, Moscow Mule, Swizzle.

Hands-on Approach

According to many well-known bartenders, mixologists and operators, the best method for perfectly clear ice is “directional freezing.” Camper English outlined the process on the Alcademics site in 2009. But what do you do to turn a single slab into several cubes?

You’ll need an ice saw to get through the slab, a traditional single-prong ice pick to break off smaller cubes, a three-prong ice pick to break off smaller cubes and shape them into spheres if you prefer (be careful!), and an ice mallet to help the ice picks do their jobs.

Treat this process as a show for the guests. For a real-world example, the bars inside Zuma restaurants have ice stations dedicated to turning an ice slab into ice cubes. These stations are an experiential feature of the cocktail program.

Semi-hands-on Approach

An aluminum ice sphere mold is a type of “set it and forget it” device.

It may seem like these would be time-consuming to use and low-yield, but most take just a minute to form a ready-to-use sphere. Most manufacturers claim their molds can produce 30 to 40 spheres per hour.

While the mold is creating a perfect sphere of ice, the bartender grabs a glass and builds the cocktail. The guest, meanwhile, enjoys the “drama” of drink production versus ice sphere production: Will the drink and ice be ready at the same time?

Ice sphere molds range in price from under $200 to $800 (and beyond). The molds themselves are appealing to the eye, simple to use, and justify higher cocktail prices. Yes, there are bars that successfully charge more for large ice spheres, often offering different types of ice for at additional charge.

Molds make spheres in a range of diameters, normally from 1.2 inches to 2.8 inches. Higher-end models also offer shapes, such as perfect spheres, diamonds or snowflakes. Several bars that use these molds utilize custom versions that “brand” the ice with their logo.

Ice Machines

There are multiple manufacturers of commercial-grade icemakers. However, there are two that are considered top of the food chain.

Hoshizaki America’s headquarters is in Georgia and the company makes dozens of icemakers. People can choose from ice shape and the pounds of ice a machine produces in a day. We’re fans of Hoshizaki for their quality and the pandemic information they added to their FAQs last year.

Manitowoc operates out of Wisconsin and manufactures several models. There are cubers, flakers, nugget producers, and there are several solutions that work for an array of venue types, layouts and service volumes.

To learn even more about creating an epic beverage program, click here for our latest download.

Image: Moritz Mentges on Unsplash

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

February 23, 2021by David Klemt David Klemt No Comments

Datassential Finds Operators Optimistic

Datassential Finds Operators Optimistic

by David Klemt

The latest report from Datassential finds that the vast majority of operators are optimistic or at least confident their businesses will survive the pandemic.

Per Datassential, operator outlook appears to be more positive than it was in December.

That’s largely due to the distribution of the Covid-19 vaccine.

Datassential Covid-19 Resources & Reports

Datassential has been releasing informative Covid-19 reports throughout the pandemic to provide helpful industry, consumer and operator data.

“Trending Upward” is Datassential’s 46th installment, and the research firm provides their Covid-19 resources at no charge.

For this report, Datassential surveyed 400 “decision makers for restaurants and on-site foodservice locations.”

Operator Outlook

Most of the operators surveyed, 220 or 55 percent, are still concerned about the challenges facing them and the industry. However, they’re “fairly confident” that their businesses will make it through.

That 55 percent represents no change from December of last year, when Datassential last gauged operator outlook.

The next two survey respondent segments tell the tale of optimism.

Of the 400 operators surveyed, 148 or 37 percent are “cautiously optimistic.” In fact, they expect to be even stronger post-pandemic.

Compared to December, that’s a seven-percent increase in operators who feel optimistic. That seven percent shifted from the “very nervous” segment,

Just 32 of survey respondents (eight percent) reported that they don’t think they’ll survive the pandemic. Losing any businesses to the pandemic and its terrible impact on the industry is beyond horrific, and the results of this Datassential report in no way minimize that awful truth. However, the percentage of operators who feel “very nervous” or otherwise pessimistic reducing by nearly half provides at least a semblance of hope for the future of the industry.

Staff Cuts

According to Datassential, more than 80 percent of operators who were forced to cut staff at some point during the pandemic have been able to bring back some of their workers.

Of the 400 respondents surveyed by Datassential, 21 percent of operators reported they hadn’t laid off any of their employees

Another 20 percent had to cut staff but were able to rehire all of them.

Nearly half (48 percent) have only been able to hire some of the staff they laid off back. Twelve percent have been unable to rehire any of the staff they had to let go.

Takeaway

Optimism is great for emotional and mental health. So is targeted relief. Operators and employees will likely feel far more confident and relieved if the industry receives actual targeted relief. This Datassential report’s findings are positive but we need Congress to act.

Click here to tell your representatives to pass the RESTAURANTS Act now.

Image: Artem Beliaikin from Pexels