Restaurants Are Suing Insurance Companies Over Unpaid Claims
And both sides say their survival is at stake. This month, the proprietors of more than 10 restaurants, bars and bakeries in Washington, including the Michelin-starred Gravitas and Pineapple and Pearls, sued their shared insurance company, joining a growing list of restaurateurs who are seeking relief from an industry they thought would protect them from any unpredictable event, including a pandemic of historic proportions. The owners are pressing carriers to honor business-interruption policies during an outbreak that has wreaked so much financial havoc that it could bankrupt insurance companies and put at risk claims not related to covid-19. One side has few cash reserves and a trickle of revenue from takeout and delivery. The other side has an $800 billion surplus that, despite its size, could vanish in a matter of months, insurers say, if they start paying out these claims. Both industries say they’re fighting for survival.
Scores of NYC’s Top Restaurants Are Reopening
But with bated breath. After closing down in March following the shutdown on dining in, several popular restaurants are reopening for delivery and takeout in a changed dining landscape. While city and state officials start to sketch out ideas of what a restricted restaurant reopening might look like — still projected to be at least a month away — more and more NYC restaurants that initially shut down completely are cautiously reopening their doors with new takeout and delivery programs. The openings are usually signaled by a couple of Instagram posts, an email blast, or a sign out front beckoning diners to order takeout, and restaurant owners admit that they are walking into unknown territory. Customer demographics have shifted as Manhattan offices remain closed and many New Yorkers have left the city. Reassembling staff has been difficult. Finding suppliers that will deliver the right ingredients on a regular schedule has been equally challenging.
12 Fixes to the Paycheck Protection Program
To save small businesses. The federal Paycheck Protection Program’s (PPP) rules on how the forgivable business loans can be spent and the unrealistic eight-week timeframe need to be changed to save small businesses from going under as a result of the coronavirus pandemic. “Many employees will not be able to come back to work within the eight-week timeframe required by the law.” The PPP program needs to recognize the reality on the ground. To the extent that the original intent of the PPP was to keep these employees on the payroll and off unemployment, it has largely failed for those businesses that were forced to close. Here are twelve suggested changes to the program.
Buffets Were Already on Their Way Out
The coronavirus pandemic may have dealt them a final blow. The coronavirus pandemic has been devastating for restaurants across the board. But the pandemic may spell the end for one genre of restaurant in particular: buffets. Buffets were already on shaky footing. From 1998 to 2017, the number of buffet restaurants decreased by 26% while the number of overall restaurants grew by 22%, according to The NPD Group, a market research company. Old Country Buffet’s parent company, Ovation Brands, filed for bankruptcy three times in the last twenty years. Ponderosa/Bonanza Steakhouse’s parent company, formerly Metromedia Steakhouse, went bankrupt in 2008, eventually selling the buffet brand to FAT Brands in 2017. Why have buffets suffered so much in the last two decades? There are several possible factors.
Cities Across America Consider Turning Streets into Dining Rooms
As restaurants struggle. As summer approaches, it’s becoming apparent that business as usual is still months away. And even as states allow restaurants to reopen dining rooms, capacity is still limited to 50% or even 25% — limits that make it nigh impossible for restaurants to make a profit. Cities across America are exploring the expansion of outdoor dining as a possible solution to restaurants’ dilemma. On May 5, Tampa temporarily closed a number of streets to allow restaurants to expand their dining spaces outdoors, and Cincinnati followed closely on May 9. Washington, DC, Milwaukee, Berkeley, New York City, and other cities have introduced similar measures.
Did You Know?
Dining booking platforms are expanding beyond restaurants. With no one dining in restaurants, reservation platforms are in the midst of a pivot. As retail reopening looms, questions remain about how best to mitigate overcrowding and waiting lines. Now, booking apps typically used by restaurants to run dining reservations — such as Resy, OpenTable and Tock — are offering new services to try and solve these problems. This month, each company unveiled new services to help with appointments and takeout — in turn resulting in them wooing non-restaurant clients. All of these platforms relied on restaurant clients. Now as restaurants are either closed or relying takeout only, these back-end services are scrambling to expand their offerings to survive the year. And because no one knows what restaurant dining will look like in the near or distant future, the booking services and their hospitality clients have had to act quick.
Employee Tip
NJDOL offers extended unemployment benefits. he New Jersey Department of Labor and Workforce Development (NJDOL) has begun notifying workers who have exhausted their state unemployment benefits of a 13-week extension they may be eligible for under the federal Pandemic Emergency Unemployment Compensation (PEUC) program. These workers are being notified via email and text message that, if eligible, they will be able to certify for weekly benefits according to a schedule based on their Social Security number. The first group will be able to certify starting Sunday. This process will continue for several weeks. Once approved, claimants will be able to certify for any back weeks they are eligible for up to the week that ends March 28, and will be able to claim the additional $600 supplement known as Pandemic Unemployment Compensation (PUC) starting with the week ending April 4.
Bielat Santore & Company – Restaurant Industry Daily Alerts
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Thank you and remember all of the “Restaurant Industry Alerts” and “Thursday Restaurant Rap” interviews can be found at www.123bsc.com/news/. We intend to continue to keep you informed as we all look for an end to this crisis.
How to market your restaurant for sale during the coronavirus pandemic. Of course, it will be challenging to market and sell businesses that have temporarily been shuttered during the pandemic, because valuations are based on historical financial data. However, whether you choose to reopen your business or not, owners can still position them for sale. So, what should you do if you want to sell in the next 6 – 12 months? Contact a good business broker that specializes in the sale of hospitality real estate and businesses. Bielat Santore & Company, Allenhurst, NJ has been brokering such sales for over 40 years and will be able to help you come up with flexible deal structures and capital sources to make a sale possible; call for a free consultation – 732.531.4200.
