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Restaurateurs: American Rescue Plan is beacon of hope

With today's presidential signature on the nearly $2 trillion American Rescue Plan stimulus, a collective sigh of relief is being heard from restaurateurs nationwide.

Photo: iStock.

March 11, 2021 by S.A. Whitehead — Food Editor, Net World Media Group

Less than 24 hours after a House vote of 220-211 in favor of the $1.9 trillion American Rescue Plan stimulus package Wednesday, President Joseph Biden this afternoon signed the epic piece of relief legislations into law as restaurant operators as restaurateurs nationwide breathed a sigh of relief with hopes the funding measure will help tide them over until a time when the industry and economy emerge from the pandemic's darkness.

Biden signed the measure a day earlier than planned, in advance of his address to the nation tonight and nearly a year to the day after the World Health Organization declared the existence of the pandemic globally. For restaurateurs, the measure contains the $28.5 billion Restaurant Revitalization Fund, which will shuttle more than $25 billion in grants their way through the U.S. Small Business Administration.

In response this afternoon, the nation's largest restaurant organization, the National Restaurant Association, sent out information calling the fund "the most important recovery tool for the industry to date." In the year since before this measure became law, the NRA said foodservice sales have fallen $255 billion and 110,000 restaurants have closed.

"The creation of the Restaurant Revitalization Fund will be a catalyst to reviving restaurants and saving jobs across the country," NRA President and CEO Tom Bené said in the release this afternoon. "Our focus from the beginning of this crisis has been on ensuring that our favorite local restaurants could access the assistance they would need to survive. This fund is a win for the smallest and hardest hit restaurants that have sacrificed and innovated to continue to serve their communities."

Restaurateurs also voiced their optimism about what the new source of money will mean to the industry at large.

"Unlike the band-aid on a gun-shot wound that was the first round of PPP, the second round of PPP in early 2021 helped many of the struggling small restaurants and chains that had not closed permanently to finally see a real path for survival through the end of the pandemic," said John Pepper, co-founder of Boloco, based in Boston. "With the expected passage of the American Rescue Plan, those restaurants who qualify will be even more likely to reach the end of COVID not just in survival mode, but operating on full cylinders with healthier balance sheets and the ability to make important investments in a viable future.

"As sales and traffic increase in the coming months — as opposed to limping along in a near-catatonic state, — many restaurants will be able to operate with less fear and more optimism. We're not out of the woods by any means, but the passage of the $28 billion-plus for restaurants will bolster the futures of thousands of restaurants and their employees."

Letha Tran — a multi-unit franchisee of Togo's — a chain based in California, agreed, saying that although she was awaiting word on receiving money from the second round of the Paycheck Protection Program, she believes this third source of restaurant cashflow puts the notion of a "return to normal" for the restaurant industry more within reach.

"I received the first PPP loan, and it was a lifesaver. It helped me keep my business afloat for a few months," Tran said in an email to QSRweb. "I was able to pay my employees and it also helped with rent. I was able to keep 80% of staff employed thanks to the loan. I applied for the second PPP loan, but I have not gotten approval yet. … I believe things will get back to normal soon and these loans are helping us keep our doors open until they do."

The grants available through the Restaurant Revitalization Fund will be administered by the U.S. Small Business Administration, with $5 billion of the $25 billion already earmarked for smaller restaurant businesses with annual gross revenue of under $500,000, while the remaining funds will be parsed out equitably, according to the act, "to eligible entities of different sizes based on annual gross receipts."

Expenses covered include those incurred from Feb. 15, 2020, until the end of 2021 and include:

Rent, mortgage.
Utilities
Supplies including PPE and sanitation aids.
Paid sick leave.
Payroll (for employees making less than $100,000 annually).
Operational costs.
Covered supplier expenses.
Normal business food and beverage costs.
Maintenance.
Outdoor seating construction.

"I believe things will get back to normal soon and these loans are helping us keep our doors open until they do."
-Letha Tran

Those businesses eligible for the funds include food trucks, restaurants, bars and other businesses devoted to serving food and drink, except for 20-plus location entities, government-operated businesses, airport-located businesses and previous aid recipients under the Small Businesses, Nonprofits and Venues act.

The act also calls for direct payments of up to $1,400 to those earning $80,000 or less annually, single parents making $120,000 or less and couples earning $160,000 or less. Benefits for the unemployed were also extended, as well as funding for vaccines and vaccine administration along with state, school and other small business relief.

The relief may also lead to restaurants helping their employees in more ways than those stipulated in the legislation.

Pepper, for example, said that although the business has struggled over the last year, as of Monday, he began paying his employees a $15 minimum wage.

"A long time coming," Pepper said. "This is the least we can do for our team members who have stuck with us through the pandemic and helped us crawl out from a pretty serious situation.

"There is simply no way we could have had the confidence to make those wage increases during such an abysmal time — where sales in our urban locations are still down 50% to 90% versus last year — without support from the Federal government.

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About S.A. Whitehead

Pizza Marketplace and QSRweb editor Shelly Whitehead is a former newspaper and TV reporter with an affinity for telling stories about the people and innovative thinking behind great brands.