We must continue to urge Biden and Congress to replenish Restaurant Revitalization Fund
What would you do if you owned a business and were notified that after barely surviving the horrific hardship of the pandemic, a significant cash windfall/grant (not loan) was imminent? Spend/invest in personal and professional necessities/improvements you were holding off on? Take care of your employees, family, colleagues, employees, vendors, and landlord? Splurge/celebrate a little, believing substantial help was on the verge of finally becoming reality?
That scenario is exactly what played out to hundreds of thousands of hopeful independent restaurant and bar owners across America recently. The promise of the Restaurant Revitalization Fund was palpable. Then, on June 30, the proverbial rug was pulled out from under most of the grant-eligible restaurants in an email from the US Small Business Administration. As a July Restaurant Business article explained, “In a letter emailed Wednesday night to applicants, the U.S. Small Business Administration said it was able to provide grants of up to $10 million to 105,000 restaurant operators before the program’s $28.6 billion was depleted. Yet, it indicated, another 265,000 applicants were left disappointed…Legislation has been introduced in the Senate to replenish the fund with an additional $60 billion, but the bill has not progressed.”
Or as Sean Kennedy, a spokesman for the National Restaurant Association, told the New York Times, “For a hundred thousand restaurants, the R.R.F. has made their future clear and stable, but for the more than 200,000 operators shut out of funding, receiving this letter today only heightens their fear and anger. We need Congress to act.”
This situation is absolute bullshit and President Biden, his administration, and Congress need to urgently replenish the Restaurant Revitalization Fund until every eligible independent restaurant and bar in America is funded according to what they qualify for. Simple math indicated that the grant program was woefully underfunded from the outset. When the US government bailed out big banks and neglectful insurance companies, or the airline and auto industries during crises, they got what they needed. Now it’s time to recognize that independent restaurants are major contributors to the US economy, and that the pandemic is one of the worst calamities we have ever faced as a nation.
Tragically, many restaurants and bars will not have time to wait for a replenishment of the fund. And ironically, many folks that received huge grants may decide to take the money and run, after contemplating, “Why reopen and go back to the rat race if I don’t need to prove how I spend the money?” In an industry with five-ish percent ‘profit’ margins, you’re essentially ‘giving back’ 95% of the grant by grinding it out and staying open. This will happen, and should have been anticipated/prevented in the screening process. Based on the initial formula for eligibility, a lot of restaurants that received huge grants were actually rewarded for shutting down 100% rather than ‘pivoting’ the way that many of their peers did to support their staff, vendors, and community. The greater the loss, the bigger the grants. Every restaurant, owner, and set of ethical standards are unique, and many true colors—good, bad, and ugly—have been revealed throughout the plague.
Even worse than learning that the RRF has been depleted, is the kick in the teeth finding out that ‘ineligible’ restaurants received huge grants by circumventing the qualification requirements or leveraging their political clout to cheat the system. Why weren’t their grants rescinded? Those funds could have been spread out to mom and pop neighborhood restaurants and bars that didn’t get a dime.
If you’re furious, I’m with you, and it’s time to take action. And the restaurants that were fortunate enough to receive grants from the first round of funding need to continue to fight for equity for their industry brothers and sisters until every eligible restaurant in America is funded. Owning and operating a restaurant and small business is a fucking grind during ‘normal’ times. After what restaurateurs have endured since the onset of the pandemic, Congress needs to act urgently to replenish the fund and equitably provide grants to every eligible independent restaurant in America. If not, with the increase in food and labor costs, and shortage of staff, the absence of the highly-anticipated grants will be the death knell for a rash of neighborhood restaurants teetering on the brink.
As for what should have been done … To me, the most glaring inequity here is that many restaurants and bars (groups) received $10 million grants, while many others received zero. It doesn’t take a Fields Medal recipient to realize that a more thoughtful, creative, equitable distribution of funds was possible. Very simply, if $28.6 billion was available for 370,000 eligible applicants, $77k+ could have been distributed to everyone eligible. I understand that $10 million grant recipients have more than one restaurant; however, instead of disbursing $10 million to some restaurant groups, even if they got $1 million and the other $9 million was disbursed in $50k increments, 180 mom and pop neighborhood restaurants that didn’t receive a nickel would be absolutely thrilled right now instead of infuriated. In an industry where 5% ‘profit’ margins are common, it would take $1 million in sales to generate $50k in profit.
This is life or death for restaurants and bars. And without our outrage and support, many more will close for good. #ReplenishRRF #FinishTheJob
Follow Independent Restaurant Coalition for specifics on how you can urge President Biden, US leaders, and Congress to do the right thing.
Patrick is the author of "I'm Your Server Not Your Servant," "A Voice for Service Industry Workers Everywhere," and "A Case for Human-to-Human Service and Civility." You can read his writing at servernotservant.com.