The American Rescue Plan's Restaurant Revitalization Fund is aimed at helping mom-and-pop restaurants that have struggled to stay open in the pandemic.

How the American Rescue Plan Will Help Independent Restaurants and Small Chains

Help is on the way in the form of $28.6 billion in grants that can be used to pay restaurant employees and cover more expenses than previously allowed.

  • The Restaurant Revitalization Fund will create a new federal program for restaurant owners with 20 or fewer locations, offering tax-free grants of up to $5 million per location or up to $10 million for multi-location operations.
  • Tom Bené, the National Restaurant Association’s president, said the law “will be a catalyst to reviving restaurants and saving jobs across the country.”

Related: How state and local officials can save restaurants

President Joe Biden today signed the American Rescue Plan into law, committing more than $28 billion in grant funds to help the nation’s struggling restaurants stay in business, along with other provisions aimed at keeping small businesses afloat during the pandemic. Unlike some Paycheck Protection Program loans, these grants do not have to be repaid.

Included in the law is the $28.6 billion Restaurant Revitalization Fund (RRF), which the National Restaurant Association hailed as “the most important recovery tool for the industry to date.” It still falls well short of the $325 billion in relief funding that the Association has called for in the past.

Click here to read the National Restaurant Association’s description of benefits under the Restaurant Revitalization Fund.

The legislation squeaked through the Senate and the House of Representatives with no support from the Republican party. Senate Minority Leader Mitch McConnell has denounced it as “a parade of left-wing pet projects that they are ramming through during a pandemic.”

“The creation of the Restaurant Revitalization Fund will be a catalyst to reviving restaurants and saving jobs across the country,” said Tom Bené, the Association’s president and CEO. “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.”

The RRF will create a new federal program for restaurant owners with 20 or fewer locations. Operators can apply for tax-free grants of up to $5 million per location or up to $10 million for multi-location operations. The grant amount is determined by subtracting 2020 sales from 2019 revenues. 

Funds from the grants can be spent on a wider range of expenses than previous relief programs. These include mortgages or rent, utilities, supplies, food and beverage inventory, payroll and operational expenses.

The RRF sets aside $5 billion for restaurants with gross receipts under $500,000. For the first three weeks of the application period, the Small Business Administration will prioritize awarding grants for women-, veteran-, or socially and economically disadvantaged-owned businesses.

“These grants will inject a much-needed stimulus along the supply chain to begin to balance the economic damage done while restaurants have been struggling,” Bené said. “We are still a long way from full recovery, and it’s likely more grant money will be needed to get us there, but today the industry has hope for the future.”