Could This ‘Blueprint for Recovery’ Save the Restaurant Industry?

The National Restaurant Association has sent a proposal to congressional leaders for how the restaurant industry can be saved from total disaster due to the coronavirus pandemic.

The association again called on Congress to provide financial relief, seeking $240 billion in aid specific to the restaurant industry for losses suffered in the COVID-19 pandemic. The money would be given outright to restaurants rather than allocated as loans and would help restaurateurs either keep their businesses open or reopen them after pandemic conditions ease, rehire and retrain staff, and pay for new measures to ensure social distancing and safety in their restaurants.

Last month the association asked Congress for $350 billion in relief funds, block grants, insurance and loans. Congress, focused on developing and passing the CARES Act at the time, took no specific action on the request.

The restaurant industry has lost more than 8 million employees—two-thirds of its workforce—as a result of coronavirus-related closures, according to a new survey released by the association. The survey also found that restaurants lost $30 billion in revenue nationwide in March and is on track to lose $50 billion in April and more than $240 billion by the end of the year.

To make matters worse, more than 60 percent of restaurant owners don’t think federal relief programs like the CARES Act will help them keep their employees on the payroll during the downturn, the survey found.

The association presented its findings in a letter to President Trump, Speaker of the House Nancy Pelosi, Senate Majority Leader Mitch McConnell and other congressional leaders on April 20.

The association also put forth its “Blueprint for Recovery,” outlining steps Congress can take to rescue the industry and ensure its survival. The plan calls for the creation of a $240 billion Restaurant and Foodservice Industry Recovery Fund (RFIRF).

The RFIRF program would compensate restaurants for:

1. Government ordered closures

2. Reopening “start-up” capital to meet the massive challenges of reorienting the restaurant space for social distancing, restocking inventory and buying new safety equipment
3. Rehiring and retraining the workforce

The association recommends that “any restaurant entity that has experienced a reduction in sales revenue of 25% or more due [to the] coronavirus can apply to the account.”

The proposal also calls on Congress to replenish funding for the Paycheck Protection Program—which is already underway—and to provide a “Healthy Restaurants” tax credit or grant program to help restaurants modify their facilities to accommodate social distancing, enhance sanitization and employee education and purchase more protection equipment to keep employees and customers safe.

The RFIRF proposal also requests temporary relief from paying federal unemployment taxes and asks Congress to pass a bill proposed by two Democrats that would expand the Restaurant Meals Program to serve people receiving SNAP benefits. Finally, the proposal calls for increased funding of $50 billion for Economic Injury Disaster Loans.

The association released its proposal the day before the Senate passed another relief bill, totaling $484 billion, that would replenish the depleted Paycheck Protection Program fund. The House is expected to pass the bill soon.

The association’s letter to congressional leaders noted that four in 10 restaurants “have closed their doors, some with no hope of reopening.”

“The restaurant industry has been the hardest hit by the coronavirus mandates—suffering more sales and job losses than any other industry in the country,” Sean Kennedy, the association’s executive vice president of public affairs, wrote.

“On March 18, we wrote you warning of a bleak outlook for the restaurant industry…as the pandemic was unfolding.  One month later, we have a clearer picture of the severe challenges that lie ahead and ask for a focused solution on behalf of an industry that is a vital part of every community,” he added.

“Each of you has a favorite restaurant in your home state—one that exemplifies your culture, your cuisine, and your community. The restaurant industry epitomizes the American dream, but it is uniquely vulnerable to both the current circumstances and the future uncertainty of dining in an era of social distancing,” Kennedy concluded.