05/15/2020
“We have been decimated by coronavirus. ” said Tom Colicchio, owner of Crafted Hospitality in New York and cofounder of the Independent Restaurant Coalition. “Most restaurateurs and chefs that I talk to, they don’t believe they’ll survive this. And if they do get open for a month or two at a time, they’ll probably close after that. We are looking at something that will completely gut the entire industry that employs 11 million people.”
The Coalition—representing more than 500,00 independent locations that provide $1 trillion to the economy—said the $349 billion Paycheck Protection Program does not help the restaurant industry.
The main argument pushed by the Coalition is that it doesn’t make financial sense to hire back employees for two months when their restaurants may not open during that time. They believe after the loan dries up, the employees will be laid off again.
To fix this issue, the group wants to move the origin date of the loan to the first day that restaurants can open and extend the maximum loan amount to three months after restaurants are allowed to reopen and operate at full capacity.
According to Naomi Pomeroy, operator of Beast in Portland, Oregon, and cofounder of the Coalition, about 60 percent of the jobs lost in March were from the restaurant and bars.
She noted that the effect on the independent restaurant industry goes beyond the 11 million employees. There’s also the millions that are indirectly connected like farmers, fishermen, winemakers, distributors, and producers.
“So many people are going to be directly impacted by this that the damage to our economy overall is at the greatest risk by not having the PPP apply to restaurants,” said Pomeroy, who applied for an SBA loan but hasn’t heard back. “ … We are a very tight-margin industry where we’re relying completely on cash flow. And most of the people that I know are not going to be able to open their restaurants again.”
While small, mom and pop restaurants struggle to gain funds, larger chains like Potbelly and Ruth’s Hospitality Group have announced reception of SBA loans."
A dark cloud continues to hang over the independent restaurant industry as a recent survey revealed 80 percent of operators aren’t certain their business will survive the COVID-19 pandemic. The survey, which included more than 1,400 participants, was released by the James Beard Foundation and the ...
