RESTAURANTS Act | KRG Hospitality

January 8, 2021by David Klemt David Klemt No Comments

Operators Remain Caught in Vortex of Open-Close-Open Cycle

Operators Remain Caught in Vortex of Open-Close-Open Cycle

by David Klemt

Another week, another round of changes for restaurant and bar operators in different states.

It has become all too familiar for those in the hospitality industry: Orders governing capacities, party sizes, bar seating, capacities, and operating hours are issued, and within weeks or days, new orders are issued.

The result is a costly high-wire act forcing restaurant, bar and nightclub owners, operators, managers and workers to deal with an inordinate amount of stress. Every cost-incurring change threatens the longevity of each affected business and the livelihoods of those they employ.

That includes reopening. What officials likely view in a positive light isn’t that cut and dry for the business owners. Whether its ignorance or indifference, governors and other officials don’t seem to realize that permitting people to resume operation isn’t as simple as turning on lights and unlocking doors. Even a small bar is a machine with many moving parts.

As anyone who has been involved in mandated close-reopen cycles knows, there are myriad operational elements that must be aligned before throwing open the doors once again. Product must be secured, a workforce must be contacted and assembled, equipment must be checked, required health and safety protocols must be reviewed and shared with staff, the word must go out to potential guests… Those challenges and more must be overcome quickly while the threat of another closure or more restrictions loom not far in the distance.

Just a week ago, we shared the story of a Minnesota operator facing a five-year liquor license suspension for defying the order issued in November of last year that banned indoor dining. On Monday, January 11, Governor Tim Walz announced restaurants and bars will be able to open again—with restrictions, of course. Indoor event and entertainment venues will also be permitted to open.

Gov. Walz’s order allows restaurants and bars to resume indoor service at 50-percent capacity, with overall capacity maxed out at 150 people. Reservations will be required, parties may not exceed six guests and must be socially distanced six feet from other parties, bar seating will be restricted to parties of two, and dine-in service must cease at by 10:00 PM.

Indoor event venues such as bowling alleys are also limited to a maximum capacity of 150 people but are restricted to 25 percent capacity. Foodservice is required to stop by 10:00 PM if the venue serves food. Gov. Walz’s orders are, reportedly, a response to infection rates falling from 13 percent to six percent.

In another (partial) reversal, bars that don’t serve food have been ordered to close in some counties in Texas. The state’s 254 counties have been separated into 22 Trauma Service Areas (TSA). Per an order from Gov. Greg Abbott, if a TSA’s hospital capacity consists of 15 percent or more of Covid-19 patients for seven consecutive days, specific restrictions are triggered. Those restrictions are only lifted when the TSA falls beneath the 15-percent threshold for seven days straight.

TSA Q, which includes Houston, restaurants are now required to restrict capacity from 75 percent to 50 percent. Bars—businesses with gross sales of alcohol of 51 percent or greater—must close. A judge overseeing Coryell County has reportedly defended the three bars in his county, stating that he sees “no reason why our three establishments should be penalized.” Judge Roger Miller doesn’t think the bars have contributed significantly to increased infections in the county and is said to be asking for an exemption so they can remain open.

For bar owners unable or unwilling to make the transition to restaurant designation, the restriction is a lethal blow. Facing reduced traffic and rising costs, even a week-long closure can spell disaster. It’s no wonder more than 3,000 Texas bars have maneuvered to offer food and increase food sales in order to be categorized as restaurants—it’s a viable means of survival. At least restaurants in Texas are able to operate 50-percent capacity rather than the 25 percent other states have mandated should they operate in a TSA that triggers Gov. Abbott’s enhanced restrictions.

The ever-shifting rules and regulations operators face across the country make it more important than ever that they receive significant, targeted aid. Yes, vaccines have been approved. Yes, foodservice workers have been recommended for the third stage of vaccine rollout. That’s not enough. A new meeting of Congress was sworn in January 3 and the pressure campaign to demand the passage and signing into law of the RESTAURANTS Act or a similar bill must continue.

This is not meant in any way to diminish the appalling chaos and terroristic violence visited upon our Capitol Building two days ago. That reprehensible act of insurrection was an attack on us all and our elected officials must reckon with that appalling assault.

However, what occurred on January 6, a date that will certainly live on in infamy throughout our great nation’s history, does not absolve Congress from their duty to save our industry and the millions of workers it employs. If anything, it highlights their responsibility to help rather than harm all Americans.

Image: Nick Fewings on Unsplash

January 4, 2021by David Klemt David Klemt No Comments

Defiance of Sweeping Restaurant and Bar Restrictions is Growing

Defiance of Sweeping Restaurant and Bar Restrictions is Growing

by David Klemt

Defiance of Covid-19-related bar and restaurant restrictions is growing.

Operators across the United States are showing their willingness to refuse to comply with orders they feel are unjust. From being restricted to delivery and takeout only to crippling capacity limits, restaurant and bar owners are making it clear they have no intention to quietly let their employees and businesses suffer.

The pushback has taken various forms so far, from civil disobedience to organized, peaceful protests.

There’s the #OPENSAFE movement in Orange County, California, to which several dozen operators have committed. These business owners have pledged to operate safely and responsibly but have refused to comply with Governor Gavin Newsom’s orders that banned in-person dining.

86 Politicians, a grassroots movement coming out of Los Angeles County in California, was created as a response to the sweeping orders kneecapping the hospitality industry. If politicians are going to hurt rather than help operators and their employees, 86 Politicians supports recalling and removing them from office.

In New York City, the Latino Restaurant Bar and Lounge Association of New York State and New York City Hospitality Alliance organized a peaceful protest just over two weeks ago. Several hundred restaurant and bar owners, operators and workers gathered and marched against Governor Andrew Cuomo’s ban on indoor dining. Gov. Cuomo’s order was itself defiant: it defied logic and went against the state’s own contact-tracing data.

Now, an operator in Minnesota is facing a five-year suspension of her bar and bistro’s liquor license for defying orders. Lisa Hanson, owner of the Interchange Wine and Coffee Bistro in Albert Lea, roughly 90 minutes south of Minneapolis-Saint Paul, refuses to comply with Governor Tim Walz’s executive order banning indoor service. Hanson has been engaged in this fight since at least December of last year.

Hanson organized a protest—a reportedly peaceful one—of around 200 people yesterday. Protestors marched and chanted from city hall to the courthouse, walking past the Interchange at one point.

The bar and bistro, which has been hit with a temporary restraining order and had its license revoked by the Minnesota Department of Health, has a sign up declaring it a “Constitutionally Compliant Business.” That sign, which appeared in a WCCO 4 News clip and bears the logo, phone number and weblink for the Constitutional Law Group, states that the Interchange doesn’t follow any government official or agency’s “orders or suggestions” for face masks or social distancing.

According to a news report, the Minnesota Department of Public Safety is moving forward with a 60-day suspension of the Interchange’s liquor license. Hanson told reporter David Schuman that she had two choices: “Either I closed permanently or I opened fully.”

Hanson chose the latter. The Interchange’s owner is entitled to a court hearing before her suspension goes into effect. A tip jar at the bar and bistro has been transformed into a legal fund collection.

Whether one agrees with Hanson’s decision to make a stand and risk her liquor license and therefore business is somewhat beside the point. The #OPENSAFE and 86 Politicians movements, the protests in New York City, the story of the Interchange (which has yet to reach its conclusion), all point to increasing tensions.

Many restaurant and bar owners and operators don’t feel as though their voices are being heard. They feel like politicians at all levels of government are targeting them, using the businesses as scapegoats. More and more, the words “arbitrary” and “unfair” are coming up in conversations about rules that are crippling—if not outright killing—the hospitality industry.

Well over 100,000 restaurants and bars in the US have closed permanently since the start of the pandemic in March of last year. Unless officials listen to operators and at least gain a cursory understanding of their needs and challenges, more closures and job losses are imminent.

To be clear, we at KRG Hospitality aren’t against logical, common sense health and safety protocols aimed halting the spread of Covid-19. One of the cornerstones of hospitality is ensuring the safety of guests and employees. However, government officials and agencies are implementing and executing orders that are, quite clearly, uninformed and severely harmful. What works for retail and other industries doesn’t work for our industry.

It’s crucial that pressure be kept on Congress and Senate to vote on the RESTAURANTS Act and ensure it’s signed into law. The 117th Congress was sworn in yesterday and we must continue to demand they do their jobs and save our industry. We’ve been targeted as scapegoats—it’s beyond time we receive targeted relief.

Politicians can expect more protests and less faith in their abilities to govern if restaurant and bar owners and professionals continue to be harmed by their orders. Perhaps the only way to persuade them to help the industry and, in turn, keep their constituents employed, is to imperil their political influence and careers. Eighty-six ignorant and harmful politicians, indeed.

Image of Minnesota State Capitol: Bao Chau on Unsplash

December 20, 2020by David Klemt David Klemt No Comments

“More help is on the way.” But not for restaurants and bars.

“More help is on the way.” But not for restaurants and bars.

by David Klemt

Speaking about the economic relief package, Senate Majority Leader Mitch McConnell (R-KY) struck what can be generously described as tainted altruism.

“More help is on the way,” said McConnell on the Senate floor on Sunday. He also took the time to attempt to absolve Republican leadership of any blame for the glacier-paced movement forward on relief, laying the fault at Democrats’ feet.

To be blunt, both parties have failed the American people and small businesses in terms of providing federal assistance during the pandemic.

After months of inaction on relief—with the exception of a Congressional vote in September that failed to pass in the Senate—and weeks of discussions and partisan sniping, negotiators finally managed to zero in on a bill with a strong likelihood of becoming law.

Yet sifting through remarks made by some politicians regarding pandemic relief over the course of the past several months, variants of the word “prompt” were bandied about.

If the package passes—which is expected to happen later today—members of Congress and Senate will no doubt perform self-congratulatory victory laps for finally doing their jobs after months of failing to do much of anything in the way of relief. Meanwhile, millions of Americans will continue to face life-altering challenges, reaching out for lifelines that are simply not there.

Included in the package are a number of details identified as “key” to both political parties:

The ability for businesses that had received Paycheck Protection Program loans which had been forgiven to deduct the costs said loans covered on their federal tax returns.
Speaking of the PPP, it will be reopened with over $284 billion intended for small businesses.
$12 billion in available PPP funds for minority-owned and “very small” businesses.
$15 billion made available in PPP funds specifically for independent movie theaters, live music venues, and cultural institutions like museums.
$600 stimulus checks for qualifying adults (and each child in a household) who earned $75,000 or less in 2019. The amount would be reduced for people who earned more. Those who made $99,000 or more last year are not expected to receive a stimulus check.
A $300 boost to unemployment benefits for 11 months, with a possible implementation date of December 27.
Gig and contract workers enrolled in the PUA or PEUC programs can expect the same $300 boost to their benefits for 11 to 13 weeks.
The deadline to spend billions of dollars made available to cities and states via the CARES Act is expected to be extended from the end of this year to be an entire year.
$25 billion in emergency assistance for renters.
A moratorium on evictions expected to be extended through the end of January.

What’s not in the package expected to be rushed through Congress? Hundreds of billions of dollars in state and local aid Democrats wanted, liability shields for corporations Republicans wanted, the $120 billion RESTAURANTS Act, or the $240 billion Restaurant and Foodservice Industry Recovery Fund.

Despite McConnell’s declaration that federal assistance is on the way, the economic relief plan leaves an industry that employs millions of American workers and contributes hundreds of billions of dollars to the nation’s GDP (four percent before the pandemic) to fend for itself.

Guy Fieri, in all seriousness, has done more for more unemployed restaurant workers than the government, raising more than $21 million in relief funds in under two months.

The hospitality jobs lost due to Covid-19 aren’t expected to return. With more than 110,000 restaurants closed—and counting—the economic impact will be felt nationwide and, in all probability, have global ramifications.

The PPP turned out to be an absolute farce: billions of dollars went to businesses that are anything but small by definition. There’s little reason to believe the process will improve much (if at all) this time around.

And while restaurants and bars have been crucial to nurturing community, connections and culture since inception, they’re clearly not considered culturally relevant institutions by politicians.

With Congress facing an uphill battle in terms of drafting the language for the relief bill and then voting on it, expecting our elected officials to propose, negotiate, draft and vote on a bill for the hospitality industry seems foolish. That means the earliest the industry can expect help—which seems exceedingly unlikely to ever materialize—is in late February of 2021.

Apparently restaurants, bars, and the foodservice professionals they employ aren’t key to politicians on any side of the aisle. Well, not until they need venues to host their campaign fundraisers, that is.

Image: Andrew Seaman on Unsplash

December 7, 2020by David Klemt David Klemt No Comments

National Restaurant Association Shares Startling Statistics

National Restaurant Association Shares Startling Statistics
by David Klemt

An email sent out by the National Restaurant Association yesterday included statistics about the state of restaurants in the United States.

The revelations are breathtakingly disturbing.

While Congress “has been trapped in a political tug-of-war,” the reality for restaurants has only gotten bleaker.

According to the NRA, their most recent survey found that 110,000 restaurants have closed since Covid-19 first dug its infected claws into the United States. That’s an increase of 10,000 closures since the NRA’s last survey, the results of which were released back in September.

Many people outside of the industry are likely under the impression these closures are the result of inexperienced owners failing to adapt. A second NRA statistic dispels that misconception.

Sadly, the average age of the restaurants that have been closing is 16 years old. Sixteen percent had been open for more than three decades.

These closures aren’t the result of inexperience, they’re largely the byproduct of mandated shutdowns—repeated, in some markets—and restrictions handed down by officials who don’t understand the business.

Unfortunately, there’s not much reason to be optimistic that these closures are temporary. The majority of survey respondents who have closed their restaurants, 52 percent, said they won’t return.

The NRA is strongly encouraging everyone to let Congress know that enough is enough—they must make real progress to help the industry.

Please visit RestaurantsAct.com, click the button to email your lawmakers, and share that link with family, friends and industry peers. Don’t let Congress leave for the year without making your voice heard and telling them to pass relief for restaurants and bars.

If our elected officials don’t act fast, things will only get worse.

Image by Wokandapix from Pixabay

December 3, 2020by David Klemt David Klemt No Comments

Competing Stimulus Plans Fail to Include RESTAURANTS Act

Competing Stimulus Plans Fail to Include RESTAURANTS Act

by David Klemt – 12/3/2020

Talk out of Washington, D.C., about yet more stimulus relief package negotiations is making one thing starkly clear: We’re on our own.

There’s no help coming, not from the federal government.

Unfortunately—but perhaps unsurprisingly—it appears the bipartisan support the RESTAURANTS Act received in Congress was an exercise in optics. The result? Fleeting hope.

Without a signature from the president, it doesn’t matter that Congress voted to pass a revised HEROES Act two months ago. Lest anyone forget, the last time a meaningful Covid-19 relief package was signed by the current president on March 27 of this year.

Another way to put that is that our elected officials haven’t managed to pass a stimulus package signed into law for 251 days. They did, however, find the time for a week-long recess for Thanksgiving.

It was announced just two days ago that a bipartisan group of congresspeople and senators had negotiated a $908 billion stimulus package. The intention was to strike a middle ground between Majority Leader Mitch McConnell’s (R-KY) desire for a $500 billion package and House Speaker Nancy Pelosi’s (D-CA) proposed $2 trillion-plus bill.

Yesterday, multiple sources reported that the $908 billion—which apparently didn’t include the RESTAURANTS Act—was dead on arrival.

Of note, at least to me, is that Senator Mark Warner (D-VA) is reported to have mentioned that this week’s touted bipartisan package had been negotiated “over pizza or pasta at people’s houses.” I have to wonder if the pizza or pasta was prepared, provided and delivered by restaurants that are among the hundreds of thousands facing permanent closure if the government doesn’t actually act in a meaningful way.

Treasury Secretary Steven Mnuchin, on his way to a House committee meeting, reportedly said, “The president will sign the McConnell proposal that he put forward yesterday, and we look forward to making progress on that.”

From what I was able to glean, the RESTAURANTS Act isn’t included in McConnell’s bill either. Neither are stimulus checks nor a federal boost to unemployment insurance payments. Supposedly it does include an extension of the problematic Paycheck Protection Program (PPP); liability protection for schools and businesses; and a $332 million grant for theaters and live venues.

If the tone of this article comes across as angry, I freely admit that’s an accurate assessment. The RESTAURANTS Act was first introduced to Congress on June 15. Elected officials have had 171 days to help the hospitality industry.

The industry that employs more than 16 million people—11 million of which are employed by independent restaurants. The industry that generates well over $760 billion in annual sales. The industry that accounts for 3.5 percent of America’s GDP. The industry that has for years provided venues, food and drinks for elected officials’ countless re-election campaign fundraisers.

The industry that, should tens or hundreds of thousands of restaurants close their doors permanently, will shed millions of jobs that will not return.

And that’s just what’s happening to the industry in the United States. The industry is similarly at extremely high risk for irreversible devastation in Canada and throughout the world.

So, yes—I’m angry. I’m angry that the millions of jobs and hundreds of billions of dollars this industry contributes just to America apparently don’t mean much to government officials.

I suppose I can only blame myself for holding out hope that the RESTAURANTS Act would be signed into law. After all, the president, speaking about restaurants back in March, said, “they’ll all come back in one form or another,” adding, “It may not be the same restaurant, it may not be the same ownership, but they’ll be back.”

They won’t be back. We’ve already suffered permanent closures. There was no prescience—or empathy—in the president’s statement. Let me make this clear: I’m not laying all of this solely at his feet. America’s politicians on all sides have failed the hospitality industry and therefore millions of Americans.

Restaurants, bars, lounges, nightclubs, hotels… This is an industry that consists of incredibly resilient people. There comes a point, however, that even the most resilient need help.

As hospitality professionals fight to return to their feet, bloodied and battered from countless blows, it doesn’t seem that the government is in their corner. Nothing would make me happier than to be proven wrong, but we’ve been at this crossroads for months now.

Image: Caleb Perez on Unsplash