The Independent Restaurant Coalition is asking Congress for $120 billion fund.
In another plea to Congress, the Independent Restaurant Coalition is asking legislators to form a $120 billion stabilization fund solely for independent brands.
The Coalition said the fund would not be accessible to publicly traded companies and large restaurant chains, but bars would be allowed to participate. The money would also prioritize minority business owners and last through 2020.
“The restaurants we love are hurting and are on the brink of extinction,” said José Andrés, chef and founder of World Central Kitchen. “Our industry has faced the steepest job losses of any industry during the COVID-19 Crisis, but have received no direct aid from Congress. Restaurateurs are some of the most creative, inspiring, entrepreneurial people I know and right now they need a little hope that they can continue creating the experiences we cherish for years to come. We are fighting to give our communities a fighting chance at surviving this crisis.”
The independent restaurant industry consists of 500,000 locations and 11 million employees and contributes $1 trillion to the economy, the group said. According to the Coalition, sales in the industry are projected to drop 50 percent for at least the next 12 to 18 months because of restrictions upon reopening and reduction in travel. A survey conducted by the Coalition and the James Beard Foundation found that 80 percent of independent operators aren’t sure their restaurant will survive the crisis.
The National Bureau of Economic Research said restaurants have a 30 percent chance of staying open if the crisis lasts four months. About 40 percent of independent restaurants are closed and the other 60 percent are operating at what the Coalition described as “severely depressed revenue levels.”
“Even with the Paycheck Protection Program, I have serious doubts I’ll be able to reopen my business,” said Naomi Pomeroy, owner of Beast in Portland, Oregon, and founding member of the Coalition. “In order to pay my suppliers—if they’re still in business—and pay for the necessary safety changes to reopen, and rebuild a business model that works at half capacity, I’ll need a jump start. There’s no guarantee I’ll make it through this time, but a stabilization fund will go a long way in giving us the tools to open our doors, generate revenue, and start getting the economy back on the right track.”
The main source of support has been the Paycheck Protection Program, which was recently replenished with $310 billion. However, independent restaurants make up less than 9 percent of the approved PPP loans despite being the top contributor to the country’s unemployment, the Coalition said.
On multiple occasions, the Coalition has argued the program doesn’t help restaurants as intended. In order to qualify for loan forgiveness, small businesses must spend 75 percent on payroll and 25 percent on rent and utilities. The forgiveness period lasts eight weeks, and starts upon disbursement. However, operators argue that since stores aren’t open now, rehired employees will be laid off once again in eight weeks. They also contend that more funds should be allocated toward rent as brands struggle to pay landlords amid the pandemic.
The Coalition has asked the federal government to push the forgiveness period until after businesses can reopen, to allow businesses to spend more on rent, and to extend the loan repayment period from two to 10 years.
“Restaurants don’t need a bailout, we need a restructuring plan to give millions of people a fighting chance,” said Andrew Zimmern, founding member of the Coalition and partner in Lucky Cricket in Minneapolis, Minnesota. “Right now the over 11 million baristas, servers, bartenders, and line cooks you used