WASHINGTON,
D.C. —
Today, thousands of independent restaurant owners and prominent chefs including
José Andrés, Nina Compton, Rosa Garcia, Naomi Pomeroy, and Andrew Zimmern
joined the Independent
Restaurant Coalition
(IRC) to call on Congress to create a $120 billion stabilization fund to
provide structured relief to the 500,000 independent restaurants across the
country struggling to survive the COVID19 crisis.
“The
restaurants we love are hurting and are on the brink of extinction,” said José
Andrés, part of the Independent Restaurant Coalition leadership team. “Our
industry has faced the steepest job losses of any industry during the COVID-19
Crisis, but have received no direct aid from Congress. Restaurateurs are some
of the most creative, inspiring, entrepreneurial people I know and right now
they need a little hope that they can continue creating the experiences we
cherish for years to come. We are fighting to give our communities a fighting
chance at surviving this crisis”
In
a letter to Congress and in a Zoom townhall with
thousands of participants from across the country, independent restaurant
owners detail plans for a stabilization fund designed to “ensure small
restaurants are able to access the resources [they] need to survive.”
Independent restaurants directly employ 11 million people, and indirectly
contribute to the employment of tens of millions more through the supply chain
of farmers, produce distributors, linen services, beer and wine distributors
and more. Restaurants contribute $1 trillion to the economy -- or 4% of
GDP -- each year.
Restaurants
are low-margin businesses, with on average about 15 days worth of cash on hand.
Due to the COVID-19 crisis, restaurants are the number one contributor
to America’s record unemployment. The Paycheck Protection Program (PPP)
has not provided the life-line it was designed to give due to stringent
requirements around when employees need to be rehired. Due to the length
of the state and municipal closures, restaurants can’t reopen and generate revenue.
Those rehired with the loan would only be laid off eight weeks later, making
restaurants ineligible for loan forgiveness and saddling them with debt at a
time they can least afford it. Independent restaurants makeup less than
9% of the approved loans despite being the top contributor to the country’s
record unemployment.
The
industry faces months if not years of uncertainty and significantly lower
sales, projected to drop 50% for at least the next 12-18 months as a result of
safety measures like putting six feet between tables, limitations on large
groups like weddings and birthday parties, reductions in tourism and business
travel and a slow return to normal socialization rates. The IRC recently
conducted a survey with the James Beard
Foundation,
which found that even after the first round of PPP was distributed to
businesses across the country, 80% of independent restaurant owners were not
certain they would be able to reopen after the crisis.
In
its letter, the IRC proposes the following principles for a dedicated $120
billion restaurant recovery fund:
- No publicly-traded
restaurant should be allowed to access the fund – Restaurants do not
enjoy the same access to capital as publicly-traded restaurants and their
subsidiaries or affiliates. They are privately-owned by individuals
in communities across the country.
- No large restaurant
chain or franchise should be allowed to access the fund –The IRC wants to
ensure franchises and large chains of restaurants are blocked from
outflanking small, independent restaurants. They believe that any group of
restaurants with more than 20 restaurants under the same name, should be
blocked from accessing these funds.
- Prioritize marginalized
communities
– Marginalized communities need to prioritized because they are at
the greatest risk. A survey from the James Beard
Foundation
found 65% of women owners and 67% of owners of color operated
businesses with $1.5 million or less in revenue.
- The fund should last
through 2020
– Grant amounts should be based on the impact to each business, and allow
operators to use funds broadly to offset operating expenses and payroll.
Government regulations will require restaurants to modify dining rooms to
reduce seating, slashing revenue. There will also be new costs for
protective equipment and cleaning measures.
- Bars and wine bars
should be allowed to participate – These types of establishments are similarly affected
by current and ongoing restrictions on operations.
“Restaurants
don’t need a bailout, we need a restructuring plan to give millions of people a
fighting chance,” said Andrew Zimmern, a founding member of the Independent
Restaurant Coalition, host of James Beard award-winning What’s Eating America
and Bizarre Foods; and partner in Lucky Cricket and several other restaurants
in Minneapolis. “Right now the over 11 million baristas, servers,
bartenders, and line cooks you used to see every week are out of a job. These
are the same people you see where you meet your constituents and the same
people that have been working– often without pay– to feed students and
frontline workers throughout this crisis. They’ve been here for us at our best
and worst times and we need to be there for them.”
Restaurants
are uniquely affected by this crisis: according to the National Bureau of
Economic Research (NBER), restaurants only have a 30% chance of staying open
if the COVID-19 crisis lasts four months – that’s lower than any other
industry. This is made worse by the reality that even when businesses are
permitted to reopen, social distancing guidelines and public hesitation is
projected to cut revenue by 50%, making insolvency a reality for hundreds of
thousands of independent restaurants.
“Even
with the Paycheck Protection Program, I have serious doubts I’ll be able to
reopen my business,” said Naomi Pomeroy, owner of Beast in Portland, OR and
founding member of the Independent Restaurant Coalition. “In order to pay
my suppliers–if they’re still in business– and pay for the necessary safety
changes to reopen, and rebuild a business model that works at half capacity,
I’ll need a jump start. There’s no guarantee I’ll make it through this time,
but a stabilization fund will go a long way in giving us the tools to open our
doors, generate revenue, and start getting the economy back on the right
track.”
Without
our independent bars and restaurants, New Orleans loses its identity,” said Nina
Compton, member of the Independent Restaurant Coalition and owner of Compère
Lapin and Bywater Bistro in Louisiana. “People travel to New Orleans for
our food, generating revenue for hotels, transportation and other businesses up
and down the supply chain. Small, predominantly black-owned restaurants like
mine have become an indispensable part of our economy and our communities. We
need a jumpstart to give my business, and our way of life, a fighting chance.”
“Restaurants
aren’t just the lifeblood of our economy, they’re the lifeblood of our
communities,” said Rosa Garcia, member of the Independent Restaurant
Coalition and owner of Mott Haven Bar and Grill, who is collaborating with
World Central Kitchen and The Bronx Community Relief Effort to provide meals to
those in need. “When this crisis hit, small restaurants around the country
like Mott Haven stepped up to feed those hit the hardest by this pandemic. We
are the heart of our communities, and we need Congress to step up and take
action to provide direct assistance to our restaurants so we can rebuild what
we once were and let millions of Americans get back to doing what they do best
— serving our communities.”
