Opening up shop
As the restaurant industry faces a crisis with the spread of COVID-19, owners and operators have closed restaurants temporarily, and in some cases permanently. The National Restaurant Association reported that 417,000 jobs from eating and drinking places were lost in the month of March, surpassing by far the old record of 67,000. Through April, two-thirds of restaurant jobs had been lost through furloughs and layoffs, according to the Association.
By Rick Zambrano
Chicago-based food consultancy Technomic projects that foodservice industry sales could drop as much as 27.5 percent this year. Under these dire circumstances, it’s easy to understand why 11 percent of restaurant operators say they will likely close their restaurants within the next 30 days. Gravitas, a fine-dining restaurant in Ivy City, recently announced they will close their doors temporarily and prepare for a reopening in the late spring once restaurants are allowed to resume full operations. This restaurant is not alone.
Restaurants look to emerge from temporary closures
Many restaurants in the DMV region and nationally are leased. This pits restaurateurs against landlords, who want to keep their cash flow healthy to pay for mortgages, improvement loans and expenses. According to Anthony Jabaly of Jabaly Law, many restaurant owners will still be obligated to their leases if they close, despite the presence of a health crisis. �If a lease does not have a force majeure provision excusing the payment of rent under a state of emergency, for instance, and most do not,� there may still be a defense, but the restaurant owner would have to defend himself in court. Commercial impracticability or frustration of purpose may constitute possible defenses, Jabaly notes, so restaurant owners should review their leases carefully with an attorney. With the current acceleration in the transition to off-premises sales, restaurant owners are also acquiring new skills and entertaining new ideas and methods to propel their businesses forward. Joe Welsh, principal, CORE Restaurant Marketing, says his clients are focusing currently on staff training, as well as preparing for a potentially very different future by looking for support in the areas of business District Restaurant News 23
