Dive Brief:

• The Independent Restaurant Coalition, an organization founded by chefs Tom Colicchio, Naomi Pomeroy and Kwame Onwuachi, with the support of over 3,500 chefs, restaurateurs and workers, sent a letter to Congress on Monday asking for further action and clarification related to the CARES Act. The letter states that “we have significant issues with the CARES Act treatment of independent restaurants as it currently stands. If these can be resolved to better reflect the realities of our industry's unique operating challenges, we will have a better chance of reopening, rebuilding, and ensuring our continued position as fundamental to the fabric of our rich and diverse communities across America.” 
• The organization is asking Congress to fix the Paycheck Protection Program to extend the maximum loan from eight weeks to three months after the restaurant can legally open to full capacity, instate a $500 million gross revenue cap that would prevent well-funded restaurants from taking funding, and increase the length of time restaurants have to repay their loans from two years to 10 years.
• The group is also asking for a restaurant stabilization fund that would provide up to $100 billion in grants to independent restaurants that gives them upfront capital to reopen, the creation of tax rebates that incentivize employment so restaurants can continue to employ full staff and pay rent even when business is slow, and ensure that business interruption insurance covers COVID-19.

Dive Insight:

Among the biggest concerns of the restaurant industry is the high unemployment figures that occurred in the last half of March, with 10 million Americans filing for unemployment over the last few weeks and over 6.6 million claims filed last week alone. Over two-thirds of March’s job losses occurred in the hospitality industry, with half of those from food and beverage jobs. 

“Over two million waiters and waitresses need a job when this crisis ends, and we need assurances from Congress that they will listen to the specific needs of independently-run restaurants during the next round of discussions,” Tom Colicchio, chef and owner Crafted Hospitality and a founding member of the Independent Restaurant Coalition, said in a statement emailed to Restaurant Dive.

While the Paycheck Protection Program will provide loans to small business owners for keeping staff on payroll, the Independent Restaurant Coalition says that the way it is written is making it difficult for restaurants to take advantage of the program. And after the loan’s eight-week clock runs out, it is likely that these restaurants will have to close again and lay off their staff, the organization said.

A lot of questions remain over how the PPP works, especially when the clock starts ticking on the provision’s eight-week time frame. Does it start once the funds are dispersed or when the restaurant reopens?

“It’s a circus out there,” Pomeroy told Restaurant Dive. “If you ask 100 people a question about PPP, like … about how it worked, what the directives are, how the interpretation is going, you’ll get 100 different answers.” 

Pomeroy, who owns the fine dining restaurant Beast in Portland, Oregon, and had to close her business and lay off her 30-member staff, said that restaurants are unlikely to open in eight weeks time, let alone 10 weeks, and a lot of people are anticipating the best-case scenario might be a reopening in July or August. 

“It’s a really long time for a restaurant to be closed, and frankly we need quite a bit of money to start back up again,” Pomeroy said.

Past-due invoices will need to be paid to vendors along with rent and other payments and making sure the restaurants still have solid relationships with suppliers and landlords, she said.

“We are the lifeblood of our economy and our communities, and we need help. We are grateful to be able to pay our employees for eight weeks and just want to ensure they’ll still have a job when our restaurants can reopen,” Pomeroy said in a statement.