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Restaurateurs respond to Senate's passage of stimulus package
Leaders of Firehouse Subs, Boloco and the National Restaurant Association weigh in on if the Coronavirus Aid, Relief, and Economic Security Act goes far enough to help restaurants stay open.
Photo: iStock
March 26, 2020 by Cherryh Cansler — Editor, FastCasual.com
The Senate passing the $2.2 trillion economic rescue package late Wednesday was good news to many, including restaurant and small business owners, who will be able to use funds to cover payroll, utilities, mortgages, payments and rent.
"So that's a plus," Firehouse Subs CEO Don Fox said in an interview with sister site, FastCasual.
The bill, which goes to the House for a vote Friday, Includes $350 billion in loans for companies with 500 employees or fewer. That includes restaurant chains with no more than 500 workers per location. The government will issue eight weeks of cash assistance through loans and will forgive those loans if the company retains workers. The bill also includes $17 billion to help small businesses repay existing loans; $10 billion for grants up to $10,000 for small businesses to pay operating costs.
Over the past couple weeks, Firehouse sales have declined about 40-45% throughout the chain's 1,000 units, but Fox is trying to ease the fallout for franchisees by deferring royalties and suspending ad fund contributions.
"We intend to sustain those initiatives until we have a better sense of where this settle out in terms of sales and traffic," he said. "Our top priority is helping our franchisees sustain their operations."
It's working so far.
None of the corporate locations have had to lay off workers yet, and Fox hasn't delayed openings of new locations but admitted that could quickly change.
"The course of events is entirely subject to consumers being able to return to normal activity and the degree to which government mandates impact various parts of the commercial 'machine' that it takes to get a restaurant constructed and opened," He said."To say the least, in respect to all long-term planning, the situation is fluid."
Perfect is the enemy of good
Boloco CEO John Pepper said he was relieved that bill passed even though it wasn't perfect.
Boloco CEO John Pepper said he was relieved that bill passed even though it wasn't perfect.
"Perfect is the enemy of good, as they say, but I'm not sure what perfect would look like so this is going to help many, many businesses," he said. "More important, it will relieve the millions of human beings and their families who are incredibly anxious and scared (as I've heard many times) these past couple of weeks."
Pepper, whose Boston-based company spans eight units, said he wasn't convinced that the measure could fill all the gaps, however.
"The crisis has already gone too long with such high levels of uncertainty none of us have ever experienced in our lifetimes, decisions have already been made by someone that could be hard to reverse," he said. "There will still be casualties as a result — businesses, individuals and loss of jobs that won't just reappear."
That being said he believes that the bill seem reasonable and that if it gets extended a few weeks or months past June 1, the industry could end up at least back to where it was today.
"But by then, many will have adjusted to a new normal, with some cushioning in sight, and the challenges won't be as unexpected or insurmountable," he said.
Sean Kennedy, executive vice president of public affairs for the National Restaurant Association, applauded President Trump and bipartisan congressional leaders in crafting the bill.
"This measure is an important first step to help restaurants weather the storm, take care of our employees, and prepare for when we are given the signal to open our doors once again," he said in an email. "There are challenges that remain before the restaurant industry, and we look forward to working with federal and state leaders to find solutions to support the cornerstone of every community."
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