Restaurants Can Seek $29B in New Federal Aid
Starting Monday. Applications for up to $10 million from the Restaurant Revitalization Fund begin May 3, and operators can register ahead of time starting Friday. Restaurant operators can apply on Monday for federal grants of up to $10 million from the Restaurant Revitalization Fund, the U.S. Small Business Administration (SBA) announced Tuesday. Applications will continue to be accepted until the $28.6 billion allocated for the program are exhausted, the SBA said. Operators can register for grants ahead of time beginning this Friday. The agency had previously revealed that priority will be given for the first 21 days of the application process to businesses that are at least 51% owned by women, veterans and what “socially and economically disadvantaged individuals.” After that three-week period, all restaurants can apply for the grants. Under the program, a restaurant can apply for up to $5 million per location or $10 million in total for multi-unit operations.
Murphy Unveils Plan to Allow Proms, Graduations
In stark contrast to 2020. Proms and graduation ceremonies in New Jersey will look considerably more normal this spring — Gov. Phil Murphy on Monday announced increased gathering limits for outdoor events and for parties at catering halls. The move comes as key COVID-19 metrics such as new daily cases and hospitalizations have begun to drop in New Jersey after a sizable increase that began in early March and lasted through mid-April. It is a stark contrast to last spring, when almost every prom was canceled and many graduation ceremonies were postponed well into the summer, if they were held at all. “This allows us to take steps so that New Jerseyans can have a much more normal summer,” Murphy said in a statement. The changes announced Monday take effect on May 10.
What Restaurant Employers Are Doing About the Labor Crisis
5 things. Across the industry, there has been a shortage of willing workers for restaurants. The industry still remains 15% below pre-pandemic job levels, according to the Bureau of Labor Statistics’ March 2021 numbers. Finding back-of-house labor has been especially difficult, operators said. Troy Guard of the Denver-based TAG Restaurant Group, said, “Labor is so challenging because now we’re having to pay dishwashers $18-$20 per hour and having to put service charges on check to help with BOH.” Guard said TAG gave back-of-house workers raises of $2 to $5 per hour “to keep people working and happy.” Employers are increasingly using hiring bonuses and technology to help streamline recruiting.” “There’s been a new focus on hiring,” Barry Gutin, principal and co-founder of Cuba Libré said. “We need to bring new people into the hospitality industry, as well as bringing back those who have temporarily left the industry. The pandemic has made hiring a challenge. We brought on our first director of training and a company called Workstream, an application process which is completely online. It pushes out job listings to job sites as well. This helps us attract and process quality applicants.”
Restaurants Serve Up Signing Bonuses, Higher Pay
To win back workers. Restaurants spent much of the past year trying to win back customers. Now, they are struggling to win back employees. Nationwide chains and independent eateries alike said they can’t hire enough workers to staff kitchens and dining rooms, just as Covid-19 restrictions relax and more consumers want to eat out again. Fast-food operators, including owners of Jimmy John’s Gourmet Sandwiches restaurants, are offering signing bonuses for recruits. Chipotle Mexican Grill Inc. is offering free college tuition to employees who work at least 15 hours a week after four months on the job. Taco Bell is giving paid family leave to company-store managers. McDonald’s Corp. owners are assessing what pay and benefits its U.S. employees most want, to better pitch the Golden Arches as an employer. Atlanta-based restaurant operator Daniel Halpern, who runs 50 TGI Fridays and other restaurants, recently increased hourly wages and is offering employees immediate pay. He said he is still short about 900 workers.
Federal Government Now Allows PPP Loans
To borrowers in bankruptcy. The federal government has quietly reversed course on a policy that had kept thousands of businesses from applying for pandemic economic aid, with only weeks to go before funds are expected to run out, Route Fifty reports. In late March, ProPublica reported on a Small Business Administration rule that disqualified individuals or businesses currently in bankruptcy from getting relief through the Paycheck Protection Program, an $813 billion pot of funds distributed to small businesses in the form of loans that are forgiven if the money is mostly spent on payroll. The agency had battled in court against several bankrupt companies attempting to apply for PPP loans, and did not change course even after Congress explicitly passed legislation in December allowing it to do so. Referencing ProPublica’s story, the National Association of Consumer Bankruptcy Attorneys wrote a letter to newly installed SBA Administrator Isabella Guzman urging her to follow Congress’ suggestion and tell the Executive Office for U.S. Trustees—a division of the Justice Department that oversees most American bankruptcy courts—to allow debtors to receive PPP loans.
The Restaurant Critic’s Job Has Changed
Maybe forever. Adam Platt believes it may be a while before he writes a negative restaurant review.
As the restaurant critic of New York magazine, Platt spent most of the last year writing about cooking for his family, takeout and delivery meals, creative outdoor dining setups and other efforts by restaurants to keep afloat during the pandemic. “It became more of a reportorial job, not criticism,” he said during a virtual event hosted by Grub Street, New York’s food and restaurant blog. As restaurants shuttered around the country last March and indoor dining remained off limits through most of 2020, the restaurant critic’s job became kind of obsolete. Six months into the pandemic, 100,000 restaurants around the country were closed either permanently or long-term, reported the National Restaurant Association. New York City was particularly hard hit, losing thousands of eateries, according to the NYC Hospitality Alliance. Those that remained open struggled to survive. Restaurants are finding that it’s easier to rely on social media. Instagram influencers are plentiful and more than willing to snap photos of their food and post them quickly to their hordes of followers in exchange for free meals. Some tell stories along with the images, but others limit the writing to “wow,” “impressive” and “delicious” captions. The reviews are less nuanced, but the personality behind the photos is the draw. Does that mean restaurant criticism as journalism is dying out?
Restaurants Poised for Surge
In M&A. Very few businesses have been hit harder by the pandemic than restaurants. Despite this carnage, private equity firm Plutos Sama Holdings sees accelerated merger-and-acquisition activity in the industry after the pandemic subsidies. Plutos Sama Holdings says that more than 110,000 restaurants in the US were forced to temporarily or permanently close in 2020. Additionally, it says sales plummeted to a staggering $240 billion below pre-pandemic forecasts. But Plutos Sama Holdings thinks the restaurant industry may be on the cusp of an inflection point. “This could be a potentially once-in-a-generation opportunity for well-capitalized entities to take advantage of historically low-price points in 2021 and 2022, to generate ROI in 2023 to 2025,” said a spokesman for the private equity firm. Others see a strong recovery coming for some of the sectors hit hardest by COVID, including travel, fitness and restaurants.
How Small and Midsized Restaurants Can Earn a Tax Credit
For giving workers vaccine-related time off. The Internal Revenue Service and the Treasury Department on Wednesday detailed a plan that will allow small and midsized businesses to claim tax credits for providing paid leave for employees to get COVID-19 vaccinations. Eligible employers, which include businesses with fewer than 500 employees and certain governmental employers, can receive a tax credit for providing paid time off for each employee to receive the vaccine and for any time needed to recover from the vaccine. “This new information is a shot in the arm for struggling small employers who are working hard to keep their businesses going while also watching out for the health of their employees,” said IRS Commissioner Chuck Rettig. The new tax credits are a part of the $1.9 trillion American Rescue Plan Act of 2021, which was signed into law in March.
DoorDash Allows Restaurants to Choose Commissions
In post-pandemic future. DoorDash Inc. is changing the way it charges restaurants to deliver their food, marking a shift in a business model that has met with increasing pushback over fees as the company positions itself for a post-pandemic world. Starting Tuesday, San Francisco-based DoorDash said it would allow restaurants to pick from three rates, setting commissions at 15%, 25% or 30% of every order. DoorDash said it would offer varying degrees of marketing and product support based on the different fee levels. Previously, restaurants didn’t have a choice. Delivery apps charged restaurants a cut of every order and set the rate. Some bigger chains used their scale to negotiate commissions as low as 15%. Many small restaurants paid as much as 30% of every order.
Did You Know?
4 things NJ businesses should know when applying for a PPP loan. The Economic Aid Act allows both first time (“First Draw”, no previous PPP loan) or second time (“Second Draw”, previous PPP loan) borrowers to apply, and funds have been set aside to help eligible borrowers in low-income to moderate-income neighborhoods and eligible borrowers with a maximum of 10 employees. To date in 2021, more than 114,500 New Jersey businesses have received $7.5 billion in funding, with an average loan amount of about $66,000, indicating that the state’s smaller businesses are obtaining PPP funds. According to the U.S. Bureau of Labor Statistics, unemployment in New Jersey remains among the country’s highest at 7.7%, showing that there is still a critical need for employers to access these forgivable loans to keep local workers on payroll or hire additional staff. Still thinking about applying for a PPP loan for your business? Here are four things to consider.
Workers split on employers requiring Covid-19 vaccination proof. 49% of working Americans believe that employers should require vaccination proof for those employees returning to the workplace. Similarly, about half (48%) of workers agree that employers should require vaccines, while 53% of workers believe employers should offer vaccine incentives to their employees. More than one-third of workers (35%) say non-vaccinated employees should not be permitted to work in-person with co-workers. This workforce sentiment research from Eagle Hill Consulting comes as vaccination rates ramp up across the U.S., with about 27% of Americans fully vaccinated. But, significant COVID-19 challenges remain for employers given the recent pause on the Johnson & Johnson vaccine, increasing cases in many states, and concerns about highly infectious new variants.
Bielat Santore & Company – Restaurant Industry Daily Alerts
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The Little Black Book on Small Business Financing
Bielat Santore & Company has released its newest informative resource for small businesses, especially those within the restaurant and hospitality industry. “The Little Black Book on Small Business Financing” is now available on the company’s Resource Library page and can be read or downloaded from there.