VOLUME 4, ISSUE 4
KROST QUARTERLY M A G A Z I N E
THE HOSPITALITY ISSUE TAX CREDIT FOR HIRING NEW EMPLOYEES
A WIN FOR THE RESTAURANT INDUSTRY: THE IRS ALLOWS DOUBLEDIPPING LEASE PROVISIONS: WHAT HAPPENS WHEN YOU END A LEASE EARLY FOR A NONPROFITABLE LOCATION
KROST HR SOLUTIONS FOR RESTAURANTS & OTHER SMALL TO MEDIUM-SIZED BUSINESSES
CLIENT SPOTLIGHT:
NICKEL DINER
WWW.KROSTCPAS.COM
KROSTCPAs.com
CONTENTS
Volume 4, Issue 4 / June 2022 Offices Pasadena (Headquarters) West LA Woodland Hills Phone: (626) 449-4225 Fax: (626) 449-4471 Principals Jason C. Melillo, CPA CEO Gregory A. Kniss, CPA Chairman of the Board Lou Guerrero, CPA, MBT Jean Hagan So Sum Lee, CPA
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Stacey R. Korman, CPA, MST
Douglas Venturelli, Esq. Richard Umanoff, CPA, MBA Christopher H. Gaynor, CPA, MS Production, Copy, and Design Anna Chen, Editor-in-Chief Mayra Silva, Graphic Designer Eileen Valles, Assistant Editor Kelley Lau, Assistant Editor Inquiries may be sent to: admin@KROSTCPAs.com Stock Photography Adobe Stock - Used with permission Copyright © 2022 by KROSTCPAs.com All rights reserved. No part of this publication may be reproduced, distributed, or transmitted in any form or by any means, including photocopying, recording, or other electronic or mechanical methods, without the prior written permission of the publisher, except in the case of brief quotations embodied in critical reviews and certain other noncommercial uses permitted by copyright law.
By Kimberly Hoang, CPA
A WIN FOR THE RESTAURANT INDUSTRY: THE IRS ALLOWS DOUBLE-DIPPING By May Sung, MSA
LEASE PROVISIONS: WHAT HAPPENS WHEN YOU END A LEASE EARLY FOR A NONPROFITABLE LOCATION
By Aric Wong, CPA, MBT
Evelyn Fernandez, CPA, MST Keith Hamasaki, CPA
TAX CREDIT FOR HIRING NEW EMPLOYEES
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KROST HR SOLUTIONS FOR RESTAURANTS & OTHER SMALL TO MEDIUM-SIZED BUSINESSES By Lisa Arangua
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SECRET SHOPPER SERVICES By Jeanette Fox
CLIENT SPOTLIGHT: NICKEL DINER By Stacey Korman, CPA, MST
THE HOSPITALITY ISSUE KROST Quarterly is a digital publication released by KROST CPAs & Consultants headquartered in Pasadena, California. Established in 1939, this full-service Certified Public Accounting and Consulting firm serves clients across a variety of industries. With a focus on recognizing opportunities and creating value, KROST equips clients with tools to make better business and financial decisions for the future.
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INTRODUCING KROST’S HOSPITALITY TEAM Jean Hagan, Restaurant Practice Principal, leads the hospitality industry group at KROST. Helping clients and operators achieve success in the hospitality industry requires not only a high level of experience, knowledge, and expertise, but it requires a special understanding of the needs and challenges of that industry. At KROST, we have helped hundreds of restauranteurs, hoteliers, and travel professionals achieve their true potential and maximize profits.
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Our team produces regular KROST Insights posted to our website. This issue will highlight some of the hot topics in the hospitality industry, including the Employee Retention Tax Credit, lease terminations, the Work SUBSCRIBE
Opportunity Tax Credit, and more.
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KROST QUARTERLY VOL. 4 ISSUE 4 - THE HOSPITALITY ISSUE
Jason Melillo, CPA CEO
HOSPITALITY Team at KROST 360° Service Model
Greg Kniss, CPA Chairman of the Board
Jean Hagan Principal Restaurant Practice
Lisa Arangua Director Human Resources
Aric Wong, CPA, MBT
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Hospitality & Restaurant Consulting
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Mergers & Acquisitions
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Raising Capital & Debt Financing
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Transaction Support & Due Diligence
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R&D Tax Credits
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Tax Planning & Compliance
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Accounting Support & Acting CFO
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Financial Modeling & Reporting
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Internal and External Audits
Experience You Can Trust Our Sector Expertise •
Food Service Consulting
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Restaurant Site Audits
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Bookkeeping & Accounting
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Assurance & Advisory
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Tax Planning & Consulting
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Technology & Systems Integration
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Mergers & Acquisitions
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Research and Development Tax Credits
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Cost Segregation
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Cybersecurity Assessment or Compliance
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Internal Control Review and Procedural Reviews
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Management Information Systems
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Fixed Asset Depreciation Review
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Operational Site Inspections
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Franchise Industry Consulting
Senior Manager Tax
Derek Johnson Manager Restaurant Practice
The experienced, multi-disciplined teams at KROST can provide tax, accounting, and consulting services for technology industryspecific needs, as well as a holistic approach to tackling multiple challenges as a true partner in the development of your business.” KROST QUARTERLY VOL. 4 ISSUE 4 - THE HOSPITALITY ISSUE
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TAX CREDIT FOR HIRING NEW EMPLOYEES
By Kimberly Hoang, CPA | Manager - Tax
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he restaurant industry took a massive hit during the pandemic. With statewide mandates enforcing closures, layoffs were necessary. As vaccines have become widely available, the industry is slowly making its way back to its pre-pandemic state. Unfortunately, as of April 2022, the industry is still over 1 million jobs below pre-pandemic employment levels. As a result, restaurants have started looking for ways to persuade employees to join their team by offering sign-on bonuses, flexible schedules, and nontraditional perks and benefits. These additional perks used to reel in new employees tend to be costly, so if the new employee has been unemployed for 27 weeks or more, you might be able to take advantage of the Work Opportunity Tax Credit (WOTC).
THE TAX CREDIT AND ELIGIBLE EMPLOYEES The Work Opportunity Tax Credit (WOTC) is a federal tax credit available to employers for hiring individuals from certain targeted groups who have consistently faced significant barriers to employment. Targeted groups include Qualified IV-A recipient, Qualified Veteran, Qualified Ex-Felon, Designated Community Resident, Vocational Rehabilitation Referral, Summer Youth Employee, Supplemental Nutrition Assistance Program (SNAP, or "food stamps") recipient, Supplemental Security Income (SSI) recipient, Long-Term Family Assistance recipient, and Qualified Long-Term Unemployment recipient. To be eligible, employees must be new hires and may not be relatives or dependents of the owners, nor can the employees themselves be owners of the business. 4
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TIME TO TAKE ADVANTAGE
Credit amounts vary upon the qualifying individual and their respective target group, but the maximum credit per individual can range from $2,400 to $9,600. With 5.7 million unemployed Americans as of April 2022 and no limit to the number of new hires who can qualify for the credit per employer, this credit may be extremely beneficial for employers. The Consolidated Appropriation Act of 2021 authorized the extension of the credit until December 31, 2025.
HOW TO APPLY
Employers must prescreen applicants to ensure they are eligible for the credit. IRS Form 8850 and ETA Form 9061 or ETA Form 9062 are required to be submitted to the state workforce agencies in which the employer's business is located within 28 calendar days after the new hire's start date. Notification of certification of the employee from the state workforce agency may take several months. Once certification is granted, the tax credit may be claimed on the IRS Form 3800 on the employers' federal tax return.
This tax credit will not only benefit the employer since gross profits will increase as the tax liability will decrease, but it may also provide opportunities to individuals who may have struggled to find a job in the past.
CONTACT KIM
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A WIN FOR THE RESTAURANT INDUSTRY:
The IRS Allows Double-Dipping By May Sung, MSA | Senior - Tax
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n August 4, 2021, the IRS released additional guidance regarding the employee retention tax credit. Notice 202149 provides guidance for employers that pay qualified wages after June 30, 2021 and before January 1, 2022.
THE EMPLOYEE RETENTION CREDIT The Employee Retention Tax Credit (ERTC), as part of the Coronavirus Aid Relief and Economic Security Act (CARES Act) and modified and extended under the American Rescue Plan Act (ARPA), was enacted to provide tax relief for small businesses during the COVID-19 pandemic. As restaurants struggled to keep open and retain their employees, the ERTC allowed restaurants to receive a refundable tax credit of up to $5,000 per employee in the 2020 tax year and updated Notice 2021-23 to $7,000 per employee per calendar quarter in 2021.
TIPPING One of the major items that differentiate restaurants from other small businesses is tips. Many restaurants rely on tips as wages to their employees. However, when the ERTC was first enacted, there was no clear guidance regarding whether tips were considered qualified wages to be claimed as part of the ERTC. This meant that many restaurant owners did not claim tips as part of qualified wages on their tax returns. However, the IRS released Notice 2021-49 on August 4, 2021, and clarifies that cash tips (which include credit card tips) that are reportable for payroll tax purposes are now treated as eligible wages for 2020 and 2021 ERTCs, assuming that all other requirements are met. This means that double-dipping is permitted on 45B (Federal Insurance Contributions Act) FICA tax tip credit income 6
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"The tips earned by employees from food and beverage establishments can now claim both the FICA tip credit and, if eligible, also the ERTC."
for federal tax purposes. The tips earned by employees from food and beverage establishments can now claim both the FICA tip credit and, if eligible, also the ERTC. While this is allowed for federal purposes, California does not conform to the federal tax rules and does not allow tips to be considered qualified wages. Taxpayers should review their 2019 tax return and 2020 tax return (if already filed) with a qualified CPA to determine whether additional refunds can be received from amending or making an administrative adjustment (AAR) to their previously filed tax returns which did not include FICA tip as ERTC credits. Contact Jean Hagan at jean.hagan@krostcpas.com for assistance or any questions.
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Human Resource Solutions Consultation and assesment services relating to employment practices
COMPLIANCE PACKAGE
Required Postings & Notices • Recruitment & Hiring Practices • On-Boarding • Employment • Safety Compliance • Wage & Hour Laws • Termination Process LEARN MORE
KROST offers a unique combination of experience and expertise to provide a variety of services to best assist our clients with all their needs. Our depth of service has grown to offer the KROST Human Resource Solutions, by providing consultation and assessment services to small and medium sized companies. The primary goal is to assist our clients in recognizing potential liability, specifically in the area of compliance relating to employment practices. 8
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LEASE PROVISIONS:
What Happens When You End a Lease Early for a Nonprofitable Location By Aric Wong, CPA, MBT | Senior Manager - Tax
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he pandemic has caused many restaurants to close due to a loss of revenue. Even after the reopening of dine-in restaurants in California, many anticipate significantly reduced revenues for a long time. Rent payments are such a big component of the fixed costs that they strongly influence a restaurant’s ability to survive. For restaurants with multiple locations, it may be decided to terminate a lease early for locations that have not been historically profitable and/or may not ever be profitable now that the pandemic is in place for years to come.
NEGOTIATING YOUR LEASE TERMS A restaurant may want to consider negotiating your existing lease terms with the landlord before deciding to terminate the lease completely. A good point of contention is that the landlord allows you to pay a reduced percentage of the rent rather than them being stuck with a vacancy for an unknown period. If negotiations fall through or a restaurant’s financial health would not allow any lease payments to continue, the only option is to move out and pay the lease termination fees. Many tax considerations need to be analyzed and understood when this situation is contemplated.
LEASE TERMINATION PAYMENTS Any amounts paid towards lease cancellation to a landlord are generally considered deductible in full in the year paid since it is essentially considered a substitute for rental payments. Since it is an ordinary deduction, this will lower the restaurant’s taxable income (or increase the loss).
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"The IRS privately ruled that a lease termination payment made by a tenant couldn’t be deducted when paid because it was made as part of an overall plan to acquire another site and relocate there." However, an exception would apply if the lease termination payment was made to acquire a new property. The IRS privately ruled1 that a lease termination payment made by a tenant couldn’t be deducted when paid because it was made as part of an overall plan to acquire another site and relocate there. The payment has to be capitalized as part of the cost of acquiring the new lease. Under the termination agreement with the landlord of the original site, the tenant’s right to terminate was expressly conditioned upon acquisition of the new location and commencement of construction there. The lease payment wasn’t considered damages in relief of an uneconomic contract; thus, it wasn’t deductible but rather capitalized and amortized over the new lease term.
LEASE TERMINATION AGREEMENTS Many times in a lease termination agreement, the restaurant tenant would leave behind the equipment, furniture, and fixtures as partial consideration of the lease termination fees as well as the leasehold improvements attached to the building. All of these items that are not retained would be considered abandoned thus eligible for Sec. 1231 loss treatment by reference to the remaining tax basis in these assets. If the restaurant is set up as a pass-through entity for tax purposes, such as an S corporation, partnership, or LLC, then the Sec. 1231 loss would flow through to the owners on their Schedule K-1 to be used on their personal tax returns. Since these losses are done under Section 1231 of the Internal Revenue Code, they are not subject to the usual capital loss limitation of $3,000 per individual return. Still, they can be favorably offset against other ordinary income (other business income, etc.). It is essential that a lease agreement is carefully analyzed for any requirements of a tenant to repair or replace property at lease termination because the components of any lease termination payment need to be understood. KROST Restaurant Accountants & Consultants can help you navigate through your lease agreement to avoid lease termination. Contact us today. 1
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IRS Private Letter Ruling 9607016
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CONTACT ARIC
Secret Shopper Service Designed to provide restaurant owners and operators with a high-quality review* of the dining experience at their concepts from our restaurant industry experts
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MEET
*
DINE-IN
CHECK
CUSTOMIZE
KROST Restaurant Accountants Secret Shopper Service is offered as a package of four Secret Shopper Reviews.
KROST HR SOLUTIONS FOR RESTAURANTS & OTHER SMALL TO MEDIUM-SIZED BUSINESSES Featuring Lisa Arangua | Director - Human Resources; Head of HR Solutions
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id you know that KROST offers Human Resource Solutions to companies that do not have access to, or resources for full-time HR personnel? We recently spoke to Lisa Arangua, who oversees this practice, to learn about her background and the value of this service to our clients. Lisa has over 20 years of experience in the HR profession. She specializes in employee relations, labor relations, benefits design and implementation, performance management, employee development, recruitment and retention, organizational development, and policies and procedures. Here is what we learned about Lisa.
CAN YOU TELL ME A BIT ABOUT YOURSELF AND YOUR PASSION FOR HUMAN RESOURCES? LISA: When I started college, I knew right away that I wanted to be in HR. I realized early in my career that I was passionate about people. I love learning about compliance and employment law, developing people, helping organizations grow, and establishing growth expectations. I found it fascinating that HR spans all areas of an organization. People are complex, and there is so much involved with successfully managing this department as an integral piece of an organization. You have to enjoy problem-solving and combating unique challenges. The pandemic is an excellent example of that. It’s been a pleasure to see how HR has evolved, too, and I enjoy navigating new initiatives such as diversity, equity, and inclusion (DE&I).
WHY DID YOU DECIDE TO LAUNCH AN HR SERVICE? LISA: As a firm, we always look for ways to enhance our client’s business(es) and improve their bottom line. Part of our desire to consult holistically led to many questions from our clients on meeting compliance standards—and lots of phone calls! I quickly realized how difficult it is for many of our clients to maintain these standards with limited resources to manage HR, especially with how quickly things have evolved. There are many challenges to deal with in any organization, and those hurdles only grew because of the pandemic. I’ve created this service with that in mind. I wanted to help KROST clients and others get their businesses compliant. With the HR service, companies can avoid penalties, legal issues, and complications that can arise—ultimately safeguarding their bottom line. 12
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WHY SHOULD BUSINESSES CONSIDER HR SOLUTIONS AS PART OF THEIR CONSULTING PACKAGE WITH KROST? LISA: Leveraging outsourced HR services is cost-effective and can mitigate real risks. If a company has not reviewed policies and procedures, safety standards, wage and hour laws, and required employee training, then it is worth an assessment. We offer the same level of care, thought, and due diligence as our other services. At the end of the day, it’s about looking out for our client’s best interest.
WHAT SERVICES ARE INCLUDED? We offer a comprehensive compliance package including: • Required Postings & Notices • Recruitment & Hiring Practices • On-Boarding • Employment • Safety Compliance • Wage & Hour Laws • Termination Process Additional services that are available include: • Various Training Programs • Full Human Resource Audit • Human Resource Consulting
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IF I WANT HR SERVICES/CONSULTING, HOW DO I GET STARTED? WHAT ARE THE STEPS? • • • • •
Step 1 – Initial Needs Assessment & Introduction to Compliance Package and What is Included Step 2 – Site visit and assessment completed with key stakeholders at location Step 3 – Comprehensive review of assessment report with key stakeholders Step 4 – Implementation Planning / Recommendations Step 5 – (Optional) Assistance with Implementation
Do you have questions or concerns about your company’s compliance standards? If you think an assessment could benefit your business, contact us today.
CONTACT LISA
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Secret Shopper Service By Jeanette Fox | Restaurant Operations - Restaurant Practice
Waiting outside the pickup window at one of my previously favorite dine-in restaurants, I took a much-needed break from my phone and peeked inside. Where once were tables and chairs for my friends and I, there were now metal racks with to-go packaging and beverages. My favorite red sofa and the warm fireplace that invited me to sit and relax while I waited for a table was no longer in sight, but instead a restaurant storage area with cold, disorganized metro shelving. I asked the person who handed me my food, “Do you think you guys will open the dining room this summer?” She responded “I don’t think so. I’m hoping we never do. We are just as busy as before, and it’s easier just to pack up to-go items than serve someone for over an hour”. Ambivalence and unprofessionalism aside, it was an interesting point. For over two years, the restaurant industry has endured a significant disruption. The pandemic has changed the way restaurants need to operate on almost every level. For some time, distance and safety have taken priority over the ‘team vibe’ and superior service experience. Familiarity makes us feel comfortable, which is why it feels so good to return home after a long vacation or work trip. It is why customers frequent the same grocery and retail stores. It is why going back into the workplace in ‘real’ clothes now feels daunting. Now more than ever, the strategy for how to move your restaurant forward needs to be revisited. What has worked pre and mid pandemic may not be working now. How will you know? You can start with the KROST Secret Shopper Service. Secret shopping, sometimes called mystery shopping, is a practice of using undercover shoppers to gather data about your restaurant. These programs exist for almost any consumer item, from eating at a restaurant to buying blinds for your home.
There are several reasons why shoppers are a good start: OBJECTIVE FEEDBACK Many restaurants moved away from the service aspect as dining stopped during the pandemic and relied on employees, friends, families, and online reviews to assess their guest’s experience. However, this practice is highly subjective and biased. They may hold back on giving negative comments because they think it may hurt your feelings or get a colleague in trouble.
CUSTOMER EXPERIENCE Restaurant customers spend a lot more time in your establishment, giving them a more direct and intimate interaction with the staff. You can’t expect to receive honest reactions if you ask them directly or role-play during a staff meeting. KROST QUARTERLY VOL. 4 ISSUE 4 - THE HOSPITALITY ISSUE
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CONTROL WHAT YOU ARE LOOKING FOR Online reviews often do not contain details about your business practices. Secret shoppers provide a written account of every area of your business to use in your decision-making. They also allow you to ask restaurant or brand-specific questions. Was the interaction friendly? Was the dining room warm and inviting? Did the server introduce themselves and have their name tag on? Was the food cleared in ‘x’ amount of time? Secret shopping can also help you determine if your restaurant remains consistent in a particular area. You can spotcheck if something has declined in the quality of your service by doing monthly assessments.
PROACTIVE MEASURES Don’t sit back and wait for customer feedback, especially feedback posted publicly on social media that can highlight weak areas of your restaurant. By the time you read it online, it could be too late. Negative postings can not only cost you current customers, but future ones as well. Newly re-opened restaurants can take advantage of this service to spot areas they can improve as the allowance of understanding is still active in the post-pandemic restaurant customer. Many of you have changed your menus, updated delivery methods, or altered service. Is it still working? Did you take off a favorite item because you needed to reduce the size? Should you bring that dish back? Do you want to return to handheld menus or keep the QR Code?
EMPLOYEE EVALUATIONS You likely have spent a lot of time training and coaching your employees to get them to the standards you would like your restaurant to be at, but how do you know if those same standards are upheld when you aren’t there? It is crucial for restaurants to identify an issue that is being caused by the staff or management. This is where our friend from the takeout window might have lost points. 16
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LEARN YOUR COMPETITION Did you know you can secret shop at competing restaurants? You can replicate your shopper program for a competing restaurant and see how they measure up. You may even be able to adopt some of their best practices. Repeat guests are extremely valuable and their business is much cheaper than the cost of acquiring new customers. Getting customers to recommend your restaurant to their families and friends is an excellent step towards successful branding in the industry. Only by knowing exactly what your guests are experiencing can you truly deliver a constantly improving guest experience that leaves your customers excited to return with their family and friends.
Enter KROST Secret Shopping Services. The current market for Secret Shopper Services has been diluted across industries and finding a restaurant-specific shopper partner is more challenging than you would expect. Many competitors hire ‘gig-workers’ to conduct their Secret Shopper services, giving you a distinct advantage in that our service will be conducted by Restaurant Industry Professionals. Our service gives clients a clear view into the ‘dining experience’ a guest receives at their location. Through one-on-one meetings, we create customized scoring, identifying location specific items you would like shopped and assigning value as pertains to standards. Ultimately, you will be given the tools to help coach and counsel employees and teams falling below internal guidelines and keeping your standards at 100%. Contact jeanette.fox@krostcpas.com to begin your customized service today!
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CLIENT SPOTLIGHT:
Nickel Diner By Stacey R. Korman, CPA, MST | Principal - Accounting
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e had the opportunity to interview our clients, Kristen Trattner and Monica May, co-owners of Nickel Diner. We gained insight into their experience founding the diner and navigating challenges during the pandemic. They were able to adapt to the community’s needs and stay relevant while remaining resourceful during these troubling times. With the help of KROST and PPP resources, Nickel Diner was able to stay in business despite the economic shift. In addition to running the day-to-day operations of a restaurant, Kris and Monica have taken an active interest in feeding their Skid Row community from the beginning of the pandemic to present day.
HOW WAS NICKEL DINER FOUNDED? Monica May: “Kris and I are LA natives as we were born and raised in the San Fernando Valley. We opened the restaurant in Downtown LA in 2008 during the height of the recession. It was not a great time for a women-owned business to start. We fantasized about a restaurant that could offer food to the local community. We found an abandoned restaurant with great bones and a kitchen in the front and back. We fell in love with the space. During the construction, as we pulled down paneling, we unearthed a 1940’s diner, including original signage and menus. The sign above the door read 'This is the place, there is no place quite like this place, so this must be the place'. The universe gave us a gift."
HOW WAS THE OPENING? The diner is located in the Historic Core of DTLA, adjacent to Skid Row. No one showed up the first couple of weeks, so we practiced “playing restaurant” by feeding the locals who lived in the surrounding SRO’s (Single Room Occupancy, government-subsidized homes). The idea of the Nickel Diner was to be inclusive as opposed to exclusive. We feed a mixed population and everyone is welcome. 18
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HOW WOULD YOU DESCRIBE THE NICKEL DINER? WHAT TYPE OF FOOD DO YOU SERVE? The diner has a whimsical style. We make handcrafted, affordable food. Our specialities include poptarts, donuts, seasonal jams and biscuits. We’ve been featured on Food Network’s “Diners Drive Ins and Dives” Unique Eats, Bobby Flay as well as LA Times Food Critic Jonathan Gold’s 101 Best Restaurants and numerous other food publications.
HOW HAVE YOU BEEN MANAGING THE PANDEMIC, CLOSURES, AND REGULATIONS? When the pandemic hit, our business was put on hold. As a restaurant, we initially thought we would be closed for 2 weeks and would reopen thereafter. Kris’ brother is a top pathologist, so we asked for his opinion on the situation. He said, “If the pandemic was an earthquake, this would be a nine on the Richter scale. Close your doors!” So, we closed the weekend before the mandate and had enough money to give the employees their final paychecks. We gave everyone what was left of the food, packed the rest in the freezer, and said, “See you in 2 weeks.” However, we quickly realized it was not going to be 2 weeks as we originally thought. “How do we help?” – since we saw things taking a turn for the worse.
WHAT IS DINE 11? Dine11 was a non-profit organization that we partnered with during the pandemic, which provided small subsidies to restaurants to feed health care workers. These subsidies allowed us to keep a core group of employees, feed people in need and keep our restaurant doors open. As the pandemic began wreaking havoc on our Skid Row community, we realized we could expand these meals to feed folks right on our block. We decided to convert ourselves into a soup kitchen. We relied on donations and grants to subsidize our meal program. These meals were subsidized by people who saw the need and wanted to help us assist others.
cc licensed (BY-SA) flickr photo by Ken Lund: flickr.com/photos/kenlund/20964884374 KROST QUARTERLY VOL. 4 ISSUE 4 - THE HOSPITALITY ISSUE
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During the holidays, when many of the homeless organizations on Skid Row were limiting services due to COVID outbreaks, we partnered with Skid Row Housing Trust to provide over one thousand meals to low-income residents for Thanksgiving and Christmas. We eventually called this our “Pay It Forward” Program. For a $12 donation, you could buy a meal for someone in need. With generous donations from customers and others who saw the importance in what we were doing, we had the opportunity to supply upwards of 300 meals weekly to the Union Rescue Mission and the John Wesly Healthcare Center on Skid Row. At the time, the actual restaurant was open only twice a week with a take-out option only, so the meal program donations are what sustained us. We realized this was a smart pivot for our business.
HOW DID KROST PARTNER WITH YOUR OPERATION? KROST calmed the storm when we needed financial assistance. They helped us with the PPP loan application and took care of all the paperwork. This allowed us to focus on our business and relieved the mental stress of the unknown. We were comforted knowing that someone was behind us since the rules kept changing for the PPP. We feared we would end up in debt because of the misunderstanding of the PPP loan, but KROST knew how to brilliantly navigate these waters. When the pandemic started, we sought help from an old school friend who happened to be married to Lou Guerrero, Tax Principal at KROST. Lou connected us with Eimy ZhangZheng and she’s been so helpful ever since.
"We feared we would end up in debt because of the misunderstanding of the PPP loan, but KROST knew how to brilliantly navigate these waters."
ON YOUR WEBSITE YOU SAID THAT YOU PLANNED TO SERVE MEALS FOR 2 MONTHS, HOW DID IT GO? ARE YOU STILL SERVING? We started with Dine11 in April 2020 and in October 2020, we began offering weekly meals on our own. However, we needed money to subsidize the meals. When we received donations and grants between October 2020 – August 2021 we were offering 300 meals a week. It’s difficult to maintain consistency with donations. Today in 2022, we are still feeding the Union Rescue Mission and John Wesley organizations on a regular basis. There still remains a tremendous amount of food insecurity on Skid Row, especially with rampant inflation.
WHAT IS REGARDING HER? Regarding Her(RE:Her) Food is an organization for women chefs and restaurateurs to reach out, support, and organize fantastic female energy in the industry. We have had great support from RE:Her. They organized a 10 Day Food festival in LA to promote women-owned restaurants and helped us launch our ”Pay it Forward” Meal Program. We were also a recipient of a $10,000 grant RE:Her and Door Dash sponsored to support women-run restaurants. Throughout this whole process, so many women have helped us. Monica had a bad kitchen accident and was unable to work for a bit. Other women chefs stepped in to help her to maintain the weekly Mission meals. Female restaurant owners always have to fight harder to get things done. Now, if your A/C breaks, you have a network of referrals to find someone honest and reliable. It’s tremendous and empowering. As women, we have these common experiences, but now we are not alone.
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WHAT ARE SOME OF THE REACTIONS THAT YOU’VE RECEIVED FROM THIS NEW MISSION? The local homeless organizations are extremely happy that we support them. We don’t just drop the food off, but rather, we go the extra mile, bring it in and set it up. A lot of the food they receive is leftovers or expired. We specifically make comfort food for them, such as biscuits and gravy, mac and cheese, bbq chicken and pulled pork sandwiches. Food we know they would enjoy eating. We actively participate in the service of the food which allows us to make connections with the folks in our community. Every week we look people in the eye and acknowledge them. When you bond over something delicious and find common ground, it humanizes people and takes away that sense of “the other”.
HOW HAS THIS CHANGED THE FUTURE OF NICKEL DINER? In September, we started to open Thursday thru Sunday with extended hours and our regular customers are slowly coming back. We were also honored to be featured at the 2021 James Beard Awards, as part of their ”Stories of Resilience and Leadership” during the pandemic. We are continuing with our mission to look after our community. For most of the general public, poverty and homelessness are out of sight, out of mind. Perhaps if we didn’t see it every day on our own street, we wouldn't be so aware, but we feel anyone else would do the same. KROST is proud to help Nickel Diner, along with other clients to get through the pandemic. We strive to provide our clients with the resources they need to stay profitable and continue making a difference. Like Nickel Diner, most of our clients are referrals, so if you know someone who could benefit from our services, send them our way or contact us.
CONTACT STACEY
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KROST QUARTERLY M A G A Z I N E
THE TECHNOLOGY ISSUE
THE FINANCIAL SERVICES ISSUE
NONFUNGIBLE TOKENS: APPLICATIONS, TECHNOLOGIES, AND OUTLOOK
SECTION 1244:
CLAIMING ORDINARY LOSSES FOR SALES OF QUALIFIED SMALL BUSINESS STOCK LENDER MANAGEMENT, LLC TAX CASE STUDY
5 POWERFUL & INNOVATIVE SOFTWARE TOOLS FOR YOUR TEAM
RESEARCH AND DEVELOPMENT IN THE FINANCIAL SERVICES INDUSTRY
DISRUPTION AND INNOVATION:
STREAMLINING CLIENT ACCOUNTING SERVICES (CAS)
WATERFALL CALCULATION
IRC SECTION 1061:
THE EFFECT OF UPCOMING CHANGES TO IRC SECTION 174 ON THE SOFTWARE DEVELOPMENT INDUSTRY
PARTNERSHIP INTERESTS HELD IN CONNECTION WITH THE PERFORMANCE OF SERVICES
FINTECH TRENDS WWW.KROSTCPAS.COM KROST QUARTERLY VOL. 4 ISSUE 2 - THE TECHNOLOGY ISSUE
M A G A Z I N E
THE REAL ESTATE ISSUE
M A G A Z I N E
PPP LOANS AND FORGIVENESS
UNRAVELING THE MYSTERY OF THE 83(B) ELECTION
CCPA
NEW PRIVACY LAW IMPACTING AREA BUSINESSES
RELIEF COMES IN THE FORM OF
R&D TAX CREDITS
FOR MANUFACTURING COMPANIES
QUANTUM COMPUTING: DEVELOPMENTS
INNOVATION, POSITIVITY, AND EVOLUTION:
GOING GREEN FOR THE GREEN:
HOW THREE BUSINESSES ARE NAVIGATING THE PANDEMIC
WWW.KROSTCPAS.COM KROST QUARTERLY VOL. 3 ISSUE 3 - THE REAL ESTATE ISSUE
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Client Spotlight: AUDIENCEX Talks Tech WWW.KROSTCPAS.COM
WWW.KROSTCPAS.COM KROST QUARTERLY VOL. 3 ISSUE 2 - THE MANUFACTURING ISSUE
MANUFACTURING Read Now »
LET US KNOW YOUR FEEDBACK! IS THERE ANYTHING YOU WOULD LIKE TO SEE IN AN UPCOMING EDITION?
Greg Kniss & Paren Knadjian Lead the Technology Industry Group at KROST
MEDIA & ENTERTAINMENT
PANDEMIC OR NOT
NOT SURE WHERE TO FIND REAL ESTATE DIVERSIFICATION?
M A G A Z I N E
STREAMING WARS: TECH TRENDS IN
MANUFACTURERS WITH INTERNATIONAL OPERATIONS SHOULD EXPECT A TAX BILL –
OPPORTUNITY ZONES & COST SEGREGATION
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KROST QUARTERLY THE TECH ISSUE
ACCOUNTING FOR
A DEEPER DIVE INTO THE UNINTENDED CONSEQUENCES OF THE PROPOSED SECTION 1031 REGULATIONS
REAL ESTATE Read Now »
KROST QUARTERLY
THE MANUFACTURING & DISTRIBUTION ISSUE
CHALLENGES FACING THE REAL ESTATE INDUSTRY IN THE WAKE OF COVID & THE ELECTION
FEDERAL TAX INCENTIVES FOR ENERGY EFFICIENT BUILDING
VOLUME 3, ISSUE 1
KROST QUARTERLY
KROST QUARTERLY VOL. 4 ISSUE 1 - THE FINANCIAL SERVICES ISSUE
FINANCIAL SERVICES Read Now »
TECHNOLOGY Read Now »
VOLUME 3, ISSUE 2
VOLUME 3, ISSUE 3
SPORTS & ENTERTAINMENT Read Now »
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KROST QUARTERLY VOL. 3 ISSUE 1 - THE TECHNOLOGY ISSUE
TECHNOLOGY Read Now »
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KROST QUARTERLY M AGA Z I N E
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