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TABLE OF CONTENTS | SPRING 2020 04 Editor’s note 10 Q&A: RAMW’s Kathy E. Hollinger 12 Shifting from dine-in to takeout 17 Insurance in the time of COVID-19 20 PPP advice for restaurant owners 23 Opening up shop? 25 March restaurant sales 28 Q&A: 2020 RAMMY Awards Season 29 2020 RAMMY Awards Finalists announced

BUSINESS Executive Editor Rick Zambrano

About District Restaurant News District Restaurant News is the perfect trade magazine for the fast-paced and competitive Washington, D.C. restaurant scene. Metro D.C. is becoming the place to experience cuisine at its best. It’s a hotbed of design, concept and culinary innovation. But Metro D.C. isn’t just for foodies—it’s also a great place for restaurant and culinary innovators to realize their dreams and build businesses. These innovators, and the larger industry of vibrant restaurant owners and operators, deserve tools to succeed. Powered by Eatery Pulse, District Restaurant News is published quarterly.

Swizzle Chill TV Photography Anthony Torres Assistant Editor Margaret McConnell Editorial Designer Ashley McCarty Contributors Eric Nomis and Matt Hetrick To place an ad or for business development opportunities, contact

Powered by Photo left: Photo by Mehrad Vosoughi. On the cover: Photo by Austin Distel. Copyright 2020 Eatery Pulse News Media.

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Editor’s Note In this incredibly challenging time for restaurants, Eatery Pulse Media is here to help. This issue compiles last-minute changes and up-to-date information on COVID-19 topics relevant to foodservice. We hope the information here is helpful to your business. In this issue, we cover best practices for delivery and takeout, insurance, leasing, advocacy at work, and the state of restaurant sales. Under Eatery Pulse’s new Restaurant Resurgence program, we’re activating our resources to help restaurants: in an upcoming national press release, we’ll announce postponement of our subscription fees for this year, free* video marketing promotion for restaurants in Washington, D.C. and $99 consulting programs. We also postponed a local sweepstakes in favor of offering gift cards to some displaced restaurant employees. In addition, we are reaching out to local restaurants, in search of two new personalities/anchors to host our video news network for restaurants. This paying gig is ideal for restaurant workers with unique and engaging personalities. Please feel free to drop me a line with questions, comments or suggestions. Check out these links for more Eatery Pulse Media resources: > National news: and > arel7 consulting: > District Restaurant News: > Our engaging foodie show: 4 District Restaurant News

Photo by Sean Cooper.

Local restaurants can tag our sister brand on Facebook @swizzlechill, and we’ll reshare your important news during stayat-home orders. Our goal remains to serve you at all times--including these trying ones--with flexible, versatile foodservice information and consulting services. Sincerely,

Rick Zambrano Executive Editor

Rick Zambrano has nearly two decades supporting food businesses, and has experience in menu analysis, menu rollout support, consulting, financial analysis, video marketing, writing, and research. As a thought leader specialized in the areas of menu analysis and restaurant trends, his insights appear in research reports, foodservice magazines and business periodicals. *Free services and subscriptions are available to business-email registered restaurant owners. And when we say free, we mean it.





Putting your best game forward now that all restaurant sales are for pick-up or delivery As restaurants in the DMV shift to an all-takeout & delivery model, what are some of the best practices to help them succeed? Quick thinking and an embrace of fundamentals is helping some restaurant owners navigate the rough waters. We have great advice and lessons learned from experts and top restaurants on page 12.

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Photo by Victor He.



Fighting for insurance coverage for lost restaurant business Business loss coverage in insurance policies is meant to provide peace of mind and a safety net during circumstances that are out of small business owners’ control. But insurance companies aren’t playing fair and restaurants are wondering why insurance won’t cover COVID-19. We have insights and a heads-up on rapidly changing developments on page 17.

Photo by Annelaure Artaud.

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How can I confidently reopen my restaurant? Some restaurant owners have chosen to temporarily close their businesses during the COVID-19 health crisis. What happens when the outbreak is over and things are back toward the new normal? Experts weigh in on page 23.

Photo by Ariel Aquero.

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Q&A | RAMW’S Kathy E. Hollinger DMV restaurant support and resources Resources are available for restaurants seeking help during the COVID-19 pandemic: the Restaurant Association of Metropolitan Washington (RAMW), always a prominent restaurant advocacy organization, has been providing even more guidance and support during this difficult time. Here is some additional information from Kathy E. Hollinger, RAMW president and chief executive. District Restaurant News: What resources are available for restaurant operators seeking help and information during this pandemic? Kathy E. Hollinger: Restaurant operators looking for help and information during this health crisis can visit our website, There, they will find our blog which is updated real-time with industry news and updates, Kathy E. Hollinger. guides for the industry, and RAMW’s Coronavirus Resource Guide. The Coronavirus Resource Guide is the one-stop-shop for all things Coronavirus. The guide contains information about the Coronavirus Worker Relief Fund, Congressional Federal Relief Packages, and specific resource guides for D.C, Va. and Md. Additional resources offered to operators include information such as PPP loan support and PPE access. As a result of the coronavirus pandemic, we have augmented our communication approach to ensure the entire restaurant community has access to pertinent information in real-time. We are utilizing Phone2Action to send immediate text message updates to P2A participants. At the start of this pandemic, we sent two daily emails recapping federal and local relief efforts, and Mayoral or Governor Orders dictating operating status and protocol. As 10 District Restaurant News

the pace of change has become slightly less rapid, we now communicate through email once a day; twice if necessary. All information is also posted on our blog. DRN: What are the next steps in the advocacy plan for local restaurants? Is there a separate local plan or does it pivot from the National Restaurant Association’s Blueprint for Recovery? Please tell us how restaurants can get involved. KEH: RAMW has launched a campaign to tell Congress restaurants need meaningful relief during Phase IV. Restaurants can get involved by telling Congress we need relief that works for them. Send an email to key Members of Congress with one click! We encourage restaurants to personalize their messages to Congress, while making sure to keep the SIX anchoring message points. These actions will not eliminate the impact of the crisis, but they will be important first steps on the road to recovery. Six anchoring Issues for independent restaurants: 1. Fix PPP so it works for restaurants 2. Provide restaurant rent relief 3. Create a fund to cover health insurance 4. Expand Business Interruption to cover COVID-19 5. Deliver access to capital for reopening 6. Defer certain tax payments to provide liquidity We want to make sure our message is visible, loud, and clear. Encourage your friends, colleagues, partners, and neighbors to participate in the campaign today.

Photo by Eatery Pulse Media.

DRN: With the National Restaurant Association issuing guidance for reopening restaurants, how is RAMW involved in filtering that down to DMV restaurant operators and providing additional resources? KEH: While RAMW is not part of determining the reopening plan, we do have a seat at the table in consideration of the plan, which is critical. We collected feedback from operators to ensure that as we glean from the plans put together by the National Restaurant Association and by our state affiliates, we are adding in the key components that are unique to our largely independent operators. Last week I was appointed by Mayor Bowser to serve as Co-Chair of the Restaurants and Food Retailers Committee--one of 12 committees that are providing industry-specific feedback in the Mayor’s Reopen DC Advisory Group.

We have been working with various state restaurant associations and the National Restaurant Association to put together blueprints for what reopening will look like in the industry. Most are still in early-draft phases of development. Ultimately, the guidance relies heavily on enhancing cleanliness and sanitation practices and integrating social distancing. The White House has included restaurants among the businesses allowed to reopen during Phase 1; however, social distancing must be practiced. This is not further defined by the Executive Branch, and reopening plans will be determined by individual states or a coalition of states. In our case, D.C., Va. and Md. are coordinating their work on reopening guidelines so the results will be consistent region-wide. District Restaurant News 11

Shifting from dine-in to takeout By Rick Zambrano

Restaurants embrace longstanding, increasinglyrelevant best practices to bolster their chances of success amid COVID-19 outbreak Amid the COVID-19 outbreak, restaurants have necessarily moved to delivery, drive-thru and curbside business only. As dining rooms have closed due to stay-at-home orders and protective ordinances in the Washington, D.C. Region, restaurateurs are fully focused on the takeout game. It’s an enormous shift for restaurants that typically have been accustomed to having only 5 to 20 percent of their sales derive from takeout. However, as we’re hearing around the DMV, restaurant owners are willing to take that gamble to keep businesses open. 12 District Restaurant News

Photo by Sean Cooper for Eatery Pulse Media.

Keeping restaurants open during the crisis may increase the likelihood they can remain open afterward. Restaurateurs equipped with solid financial knowledge are more likely to weather the full Coronavirus storm by giving heightened attention to food cost, labor leverage and technology services.

Following the right economics Amir Mostafavi, founder and CEO of South Block Juice, a chain of nearly a dozen healthcentric juice and smoothie shops, recently expanded his relationship with Uber Eats so that all stores could take orders from the third-party delivery provider. As a multi-unit operator, Mostafavi applied this additional leverage to negotiate fees. In fact, restaurant chains and multi-unit restaurant companies have had access to more latitude on fees for quite some time. The same principle applies to additional delivery providers, such as DoorDash and Grubhub. Providing sharply-increased takeout and delivery service can present some disadvantages.

There’s a significant cost to package items for to-go usage, transport them where they need to go and also pay for the technology to support the process. Although third-party delivery companies provide a ready-to-launch model that restaurateurs can embrace quickly in these desperate times, these programs charge fees of as much as 30 percent, potentially rendering net sales unprofitable. By and large, restaurant profit margins hover around 10 to 15 percent. If a business chooses to operate exclusively in a third-party delivery format, it will be more likely to bleed cash. Knowing the economics and hard numbers of the business helps restaurant owners rise to the occasion. In D.C. and around the country, restaurants are finding creative ways to supply food to their communities while expanding their menus and focusing on more profitable sales. Companies like Great American Restaurants, a local, multi-brand operator, have continued to innovate. At Patsy’s for example, for $59.95, customers can pick up grocery kits containing 10 pantry staples, including chicken, butter, rice and toilet paper.

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South Block Juice has been using its own staff to deliver its juices, as well as smoothie kits. The take-home kit includes enough acai and toppings for preparing six Acai Bowls at home, delivered straight to customers’ doors. Meanwhile, the store’s traditional menu is available for delivery through Uber Eats. Customers within 12 miles of the East Falls Church shop can access staff-powered delivery.

Communicating When dining room closures due to COVID-19 became commonplace, local restaurants that had already forged communication channels with customers had a leg up. Although Gravitas, a fine-dining gem in D.C., did not yet have an established delivery and pick-up order system, its customers quickly received email notification that take-out/delivery service would be up and running soon. Many restaurants in the D.C. area were communicating enhanced cleaning and sanitation procedures to existing customers via email and social media.

practices that restaurants have implemented. At South Block, for example, orders are double-packed in zippered storage bags, then sealed with tamper-evident stickers. As COVID-19 continues to spread, restaurant owners have instituted more stringent policies around restaurant employees that show symptoms of illness. At South Block, in addition to other restaurants in the area, sick employees are not allowed to punch in for work. Mandatory face masks provide South Block staff, and by extension, customers an additional measure of safety. Restaurants and contact surfaces are cleaned every 30 minutes; a big digital clock reminds staff of these intervals. Keeping bathrooms open for customers and delivery drivers, including the Uber Drivers that pass through, allows the South Block extended family and clientele to wash hands and stop the spread of germs and viruses.

Leveraging technology

Embracing safety

The COVID-19 health crisis and its impact on restaurants has brought an alreadypressing question into sharp focus: How are restaurants to stand out in a crowd when everyone is navigating the same virtual space? The answer is technology. A rapid evolution of technology seems to demand that restaurant owners get degrees in Information Technology. This is only a slight exaggeration; the National Restaurant Association, in its Restaurant Trends 2030 report, projected that there will be a greater need for college educated, tech-savvy professionals working within restaurants in the not-so-distant future.

While many restaurants across the country have excelled at paying attention to safety and sanitation more than most other businesses, they are increasing their vigilance and stepping up communication about it during the COVID-19 outbreak. Customers need to be apprised of the enhanced action plans and

Customers’ responses to evolving procedures of restaurants during the COVID-19 health crisis have made it clear that they are willing to continue buying. Restaurants can respond by leveraging technology to make customer ordering easier and more seamless. For many customers, phoning a restaurant is old-school,

South Block doubled its weekly customer email blasts and tripled its Instagram posts. Mostafavir knew it was crucial to inform customers his stores were open and take their customers’ health seriously. Keeping communication flowing is vital to the livelihood of any retail establishment. Early implementation of this practice that gave some restaurants a jump on the competition and increased exponentially their chances of being patronized.

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and waiting on hold is a time-waster. A report from foodservice consultancy Technomic and the National Restaurant Association, Harnessing Technology to Drive Off-Premises Sales, which we highlighted in a past issue, indicates that customers are ready to enjoy food at their pace and convenience, and streamlined takeout and delivery already play a big part in that. Pre-COVID, 90 percent of customers already ordered takeout at least once per month and 79 percent requested delivery. Many restaurant owners haven’t kept pace with the demand for off-premises business. In addition, 35 percent of consumers were already saying they wanted to order delivery more often. One of the best components of off-premises sales success is online ordering technology, offered by vendors such as Square, ChowNow and Mobile and kiosk technology are additional streamlined ordering options, with the added benefit of less cash and fewer cards exchanging hands. With frequent, proper cleaning, kiosks may be less likely to spread germs than person-to-person contact. “Cashless retail is also going to become the norm,” says Sam Zietz, chief executive of GRUBBRR, a technology company that supplies ordering technology, including kiosks. “Cash is the dirtiest item in restaurants and retailers, and frankly, fewer people are using cash because of the germs it may carry. Cash goes through many people’s hands and with COVID-19, everyone is becoming more aware of what they are touching.” Mobile apps currently allow customers to order food without subjecting themselves to situations lacking social distancing. From the convenience of cars, customers can order and head to curbside pick-up areas that are now prevalent among the restaurants that are still operating. Custom restaurant ordering apps are highly under-used on the restaurant end of the equation. According to Harnessing Technology, 43 percent of delivery users order food via restaurant apps, but only 18 percent of restaurants offer such apps. What’s more,

Photo above by Victor Aldabalde. Photo center by Robert Anasch.

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56 percent of consumers order food online via websites, but only 45 percent of restaurants offer this convenience. Now more than ever, restaurants are best served by using technology to let customers order food in the way they want. For curbside convenience, companies like GRUBBRR offer mobile kiosks that can be placed outside restaurants. “GRUBBRR works with many quick service restaurants and we’ve seen some of them are beginning to use technology in unique ways,” notes Zietz. “Many of the restaurants that already relied on our kiosks are now taking those ordering kiosks and putting them outside…. We also recognize that people may be afraid to touch kiosks due to germs, so last week we rolled out a contactless feature where people can use their phones and QR codes for hands-free ordering.”

Packaging to make a difference The best packaging has always won the hearts of consumers. Food delivered hot and ingredients that stay separate during travel to customers’ homes win the loyalty of customers. Now, during the current health crisis, customers are looking for safety in packaging of the food they pick up or have delivered. More than ever, “tamper-evident” seals and packaging that keeps food hot and intact are critical to success. Branding also matters. When customers order from P.F. Chang’s each order comes in a branded bag with branded napkins. Packaging is an extension of each brand. In these worrisome times, it’s even more critical for restaurants to both reassure customers with their company’s safety precautions, and remind them of the value proposition of their brand. South Block, for example, insists that their own branded bags hold the orders that go out with Uber Eats. Third-party delivery companies have been aggressive in promoting their own brands. But restaurants are best served by establishing a direct connection with customers, letting them know they are not a commodity, but a brand with specific advantages. In many cases, a 16 District Restaurant News

delivery order might be the first introduction to a particular restaurant. Including branded packaging and special offers with a delivery order is critical. Restaurants can help remind customers of where the food is prepared and its safety (thus tamper-evident seals currently being used to show food hasn’t been touched.)

Summing it up Off-premises business is challenging to manage successfully under normal circumstances. During the current COVID-19 crisis, it’s even harder. Some of the best practices that top restaurants have embraced over time hold even more meaning today: a deep understanding of a restaurant’s economics, communication with the customer, leveraging technology, using great packaging ensure a successful outcome. The end results should be that food is delivered safely, with a smile, and hot/ready to eat. During the health crisis, additional best practices have emerged to the forefront: detailed attention to and communication about safety and sanitation; and a healthy workplace where employees are safe and can prepare safe meals. Operating a restaurant at 20 or 30 percent of customary sales is by no means easy. In our current takeout-only and virus-threatened environment, restaurants can use these principles, guidelines and tools to survive and best serve their customers and communities.

Photo by Charles Deluvio.

Insurance in the time of COVID-19 By Eric Nomis

Restaurant owners face the reality that their insurance claims may be denied

Restaurants continue to struggle with plummeting sales due to the current COVID-19 health crisis. As they seek help during the pandemic, they’re finding that their business interruption insurance policies are not covering COVID-19-related business losses. In most cases, these policies have been paid faithfully for years and now cannot be tapped. In a coronavirus task force update on April 10, President Donald J. Trump said he supported payment of small business claims for business interruption insurance. District Restaurant News 17

Photo by Piotr Szulawski.

“Many businesses are facing unprecedented losses of income as a result of the impacts of COVID-19,” said Skip Durocher, partner at the international law firm Dorsey & Whitney’s Litigation and Regulatory Practice Group. “Some of those losses have occurred, and continue to occur, due to actual presence of the COVID-19 virus in their business property. It only makes sense that many of these business owners will turn to their insurance for recovery of these business income losses.” A restaurant industry coalition group has written to Congress to request changes in the CARES Act including additional protections, such as honoring business interruption insurance. The group is asking for the federal 18 District Restaurant News

government to step in and require business interruption insurance payouts for COVID-19. “Unfortunately, these very firms we rely on to protect us are avoiding coverage during this disaster by falsely claiming that the virus does not cause a dangerous condition to property,” the group wrote. “The entire restaurant sector and all connected industries are crippled by a nationwide public health shutdown impacting all of our livelihoods.” Another advocacy organization, the Business Interruption Group, was formed after Chef Thomas Keller sued insurance companies on behalf of the Thomas Keller Restaurant Group, in California and in Cajun Conti, Louisiana, to obtain COVID-19 business interruption insurance coverage and to establish

precedent. Restaurant Hospitality reported that Gauthier Murphy & Houghtaling LLC, the law firm that filed the suit, has partnered with celebrity chefs and restaurant industry groups in this endeavor. The lawsuit aims to dispel the claim by insurance companies that no actual damage to property has been suffered as a result of COVID-19. Indeed, the claim asserts, property is damaged because contact surfaces are exposed to COVID-19, where the virus can remain for days and cause harm. A key factor that restaurants can use to determine whether there’s a chance of coverage is making sure their policies don’t include a virus exclusion clause. The claims being brought by Keller acknowledge that the policies that should honor claims immediately are those without that exclusion. “Even when a policy specifically calls for this coverage (not all do), there is a long list of tactics and strategies (typically hidden in the fine print of policies) insurers use when faced with massive numbers of claims [to deny/deflect],” said attorney Brian Mahany in an emailed statement. Experts agree that restaurant owners should carefully examine their policies with an attorney to determine the best course of action. Time is a precious commodity right now. Although restaurants could benefit by victories in the courts or through government action that could bolster COVID-19 interruption insurance claims, restaurant owners would be best-served by filing claims as soon as they can. It’s clear that quite a few insurance companies will fight claims. According to John Houghtaling, lead attorney for the Keller lawsuit, insurers are facing claims that could amount to $300B, and may in turn need government assistance themselves.

Photo by Miha Moisa.

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PPP Advice for restaurant operators By Matt Hetrick

Guidance from CPA Eats breaks down Paycheck Protection Program (PPP) Editor’s comment: The following insights are attributed to CPA Eats, used with permission from the firm. They are edited for conciseness.

If you received the Paycheck Protection Program (PPP) loan, the decision to keep the loan will come down largely to working capital on hand and your expectation of being able to achieve forgiveness. We highly recommend depositing the PPP loan funds into a separate bank account and spending them only on qualified expensespayroll, rent, and utilities, generally. If you spend the funds, keep an accurate accounting of every dollar spent. Determine whether you need an immediate cash infusion from PPP funds by examining your working capital, cash on hand, money in the bank, operating status and sales. 20 District Restaurant News

When to return the loan

How to manage your loan

If you are in a strong working capital position and are currently closed, without plans to bring staff back at full force within the timeframe currently required by PPP rules, make your spending decisions with the PPP loan funds carefully. The best course of action may be to monitor how the PPP rules evolve over the next several weeks, rather than rushing to spend the money in a fashion that is not consistent with the long term success of your business. If the PPP rules do not change in a beneficial manner and you are unable to reopen and bring your staff back by June 30th, you may be better off simply returning the money as you are not able to spend it in compliance with the rules.

Any PPP funds that are not spent can be returned. You should not spend wastefully. While a small portion of the PPP funds can be used for rent and utilities, you should focus on rent abatement conversations with your landlords at this time, particularly if you are shut down. The PPP loan rules do not allow you to achieve forgiveness without spending the vast majority of PPP funds on payroll. You should be plotting a sustainable long term structure for success that works for your restaurant, your employees, and your landlord. Borrowing short term money to pay rent during the shutdown should not be your default if you do not expect PPP forgiveness. Remember, in the current environment, landlords are able to adjust mortgage terms and are obligated to pass the savings through to tenants.

When to keep the loan • If you are operating at a high volume on delivery and takeout (more than 50% of prior year period sales) and have some money in the bank, then PPP is likely highly beneficial for you, even if you have only a limited amount of employees on payroll and can only get partial forgiveness. Whatever amount is forgiven will benefit you, as you are still going to pay the employees and the rent, with or without the PPP. • If you are out of money and open or closed, but still have the expectation that you will be bringing back a full workforce eventually, the PPP is likely an outstanding program to help provide you with the working capital you need to keep going. • If you do not have cash currently, this is the most realistic way to get working capital. It is the only real source of working capital available. • If you are open with a reduced payroll, you can use PPP to pay those who are currently working, but do not use it just to put everyone back on the payroll.

When to be persistent • If you did not get the PPP loan in the first round, connect with your bank now. If we learned anything from the first round of applications, it is that the money will go quickly. If your main bank is not responding, look into nontraditional lenders that are not banks. Navigate to https://www.sba. gov/paycheckprotection/find for lender recommendations from SBA. • If you submitted an application and it was denied, make sure whoever you worked with before is going to effectively execute your loan. You should not assume that your loan application will automatically be put through again, and you should take every step to ensure that it is in fact resubmitted. • Make sure you are connecting with a specific person at your bank during this process. You need a firm answer: call and email until you speak with someone directly.

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The future’s not set for restaurants, but many eateries will never reopen due to a lack of funding and capital infusion. Photo by Nathan Dumlao. Photo Center: Photo by Josh Appel.

How to consider PPP vs. Employee Retention Credit (ERC) The ERC might be a better option for any business with a decent-sized working capital reserve that is either operating at a limited ongoing level (less than 50% of ongoing sales) or currently dormant. The PPP loan might work better for businesses who are either about to, or have already run out of money.

What is the ERC? The Employee Retention Credit is a fully refundable tax credit for employers, equal to 50 percent of qualified wages (including allocable qualified health plan expenses) that Eligible Employers pay their employees. This ERC applies to qualified wages paid after March 12, 2020 and before January 1, 2021. The maximum amount of qualified wages taken into account for each employee for all calendar quarters is $10,000, making the maximum credit for an Eligible Employer for 22 District Restaurant News

qualified wages paid to any employee $5,000. You can access this credit by reducing upcoming deposits or requesting an advance credit on Form 7200, Advance of Employer Credits Due To COVID-19. You CANNOT utilize both PPP and ERC, so make sure to weigh the pros and the cons ahead. If you have additional questions, you can connect with CPA Eats directly. We are here to support you during these uncertain times and provide you with information that will help you make the most educated decision. As more details become clear, we will share. While these are extremely uncertain times, we cannot share a blanket answer that works for every restaurant. Ultimately, the loan strategy and decision is going to be made based on the unique nature of your restaurant. You should always consult an accountant or financial professional. This is general guidance only.

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

Restaurant operators are eager to open dining rooms in a manner that is safe for customers and employees. (Shown: Barley Mac). Photo by Sean Cooper for Eatery Pulse Media.

management, marketing and communication with customers. Jabaly points to loan programs, like the EIDL program and Paycheck Protection Program (PPP), available through SBA-backed funding and made possible by recent action by Congress. Although funding for two popular loan programs ran out, new funding has been approved for the Small Business Loan program by the Senate to the tune of $320B, with $60B set aside for small lenders, an aim to get funds to businesses that usually have trouble accessing loans. Small businesses, including restaurants, are eager for the new funding as many had been left out. He adds, “One feature of the new loan program is that the debt can be forgiven over time if certain conditions are met, thereby turning it into a grant, for instance.” PPP helps rehire employees through funding payroll at levels going back to February 15, but it also provides for rent, utilities, mortgage payments and interest.

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Jabaly notes that financial services companies are also stepping in to provide funding. “Some private industry companies, like Goldman Sachs, have just announced hundreds of millions in economic relief programs for small businesses though,” he says. “What they would look like will become more apparent as processes become implemented.” Restaurateurs should discuss their options with their financial institutions,” suggests Jabaly. Restaurants will also need help once they have reopened. Assuming they are able to get out of arrears with landlords or negotiate deferrals that are suitable for their business, restaurateurs will need to have the support of business partners and business consultants to accelerate their sales. The future is uncertain, and many business skills may come in handy to be develop a strong discipline that works in whatever situation arises after businesses are allowed to reopen fully. Coming out ahead after shuttering temporarily is possible, but it requires knowledge of accessible resources and expert advice.

March restaurant sales By Eric Nomis

Results provide glimpse into impact of COVID-19 outbreak

Analytics firm Black Box Intelligence reported March restaurant comparable sales down 28.3 percent. Industry-wide, the COVID-19 health crisis has precipitated a drop in sales for restaurants as they survive in takeout mode. Comparable sales traffic was down 29.2 percent. The lack of variance between these two metrics suggests only a slight growth in average check (0.9 percent), with takeout orders for many sit-down restaurants being much smaller in average size compared to normal sit-down checks. Quick-service restaurants were part of the most resilient segment in March. District Restaurant News 25

Photo by Igor Rand.

Markets with the most dense populations and those hardest hit by the epidemic fared the worst. New England posted the worst comparable sales, down 32.5 percent; there, comparable traffic was down 33.1 percent. Comparable sales were down more than 70 percent during the last week of March in these coronavirus-impacted regions: New England, the Western region, New YorkNew Jersey, the Mid-Atlantic, and California. These markets are also within the territories that have experienced the biggest COVID-19 outbreaks. The Southeast posted the best comparable sales at 23.5 percent and a 24.9 percent decline in comparable traffic. During the last week of March, the Southeast was the only 26 District Restaurant News

market able to pull away with less than a 60 percent comparable sales drop. For the overall industry, March’s comparable sales traffic doesn’t fully capture the impact of the COVID-19 crisis on the entire month, noted Black Box. In the last two weeks of March, restaurant comparable sales were down 65 percent

Has the restaurant industry hit bottom? “Although it is hard to classify anything as good news right now, there is a positive in the sense that the decline in sales may have reached bottom based on early April data,” said Victor Fernandez, vice president of Insights and Knowledge for Black Box Intelligence. “As more restaurants focus

their undivided attention on their off-premise offerings and guests adapt their consumption to this new environment, plus some of the government relief measures take effect, some small improvements may lie ahead.” According to Black Box, average check grew 2.4 percent on a comparable basis. The last two weeks of March, average check growth was virtually non-existent. Quick-serves saw a surge in check growth, due to larger family-sized orders. Casual-dining fared the worst in average check growth with the lack of beverage orders and alcoholic drinks contributing to the story. Municipalities across the country have lessened restrictions on alcohol and allowed sales for off-premises consumption. Virginia was late to the table, but recently allowed restaurants to sell mixed alcoholic drinks for takeout.

Although still uncertain, the path to recovery may look a lot like the one after the Great Recession. With unemployment sure to hit 20 percent and many businesses likely to fail during this health crisis, there will be a downward force on economic activity postcrisis. After an initial surge, the economy could take months to recover, suggests Naroff. According to an early April survey conducted by Black Box Intelligence, 22 percent of restaurants laid off workers and another 67 percent furloughed some employees. Data from Black Box comprises the tracking and analysis of more than 300 companies, over 2.8 million employees, over 50,000 restaurant units and $75 billion in annual sales.

“While full-service restaurants were experiencing same-store declines of more than 70 percent year over year by the last week of the month, fast casual’s decline was about 50 percent and quick service lost only about 30 percent of its sales during the week (compared to last year),” noted the Black Box March report.

Economic outlook and the restaurant road ahead Black Box suggests two main questions define the near-term outlook: (1) When will the economy start to reopen, and (2) what will the recovery look like? “The answer to the first question is unknown,” said Joel Naroff, president of Naroff Economic Advisors and Black Box Intelligence economist. “As for the second, it is critical to understand that the programs put in place are stabilization plans not stimulus plans. You have to stop falling before you can start rising again. When the opening does occur, the early phase should be very strong. Given the massive number of business closures, their reopening will create a huge rise in activity. Also, households will have to restock, creating a temporary surge in consumer demand.”

Even though many states and cities have allowed adult beverages to-go, the lack of on-premise drink business has had a significant adverse impact on bars and restaurants. Photo by Adam Jaime.

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Q&A | Julie Sproesser, RAMW managing director RAMMY Awards 2020 Season The RAMMYS, the Metro-D.C. regions restaurant awards show, may arrive a bit later than we expected due to the COVID-10 pandemic. Nonetheless, when it does, it will be a welcome sign that things may be returning to a form of normalcy. The RAMMY Awards spotlight and reward the restaurant industry’s best restaurants, chefs, artisans, entrepreneurs, and professionals in the D.C. area. This year’s RAMMYS—the 38th annual—is organized by the Restaurant Association of Metropolitan Washington (RAMW) and hosted by Events DC, the city’s premier entertainment and sports events authority. Originally slated for July 26, the event may take place later in the year as RAMW prepares with Events DC, which runs the Walter E. Convention Center, the RAMMYS venue. Here, we discuss the upcoming RAMMYS season with Julie Sproesser, RAMW managing director. District Restaurant News: Please tell us what we’ll see that’s new this year during the 2020 RAMMY Awards. What is most exciting and new about The RAMMYS each year are the restaurant and industry finalists who we are thrilled to be able to honor for their incredible talents as we bring the industry together for a night of celebration. The RAMMYS create a fantastic platform to showcase new programming and we will do that through our award category promotions that invite foodie fans to eat, drink, and experience all the industry has to offer. [This year, the RAMMY Awards nominations announcement was made virtually on May 4. Finalists in 22 award categories, in addition to the recipients of the Honorary Milestone and Duke Zeibert Awards were announced at www.] DRN: Please recap the changes this year to the nominations and the benefits for the local restaurant industry.

JS: This year, the judges panel amended the eligibility requirements for nominees in five restaurant categories. These previously required restaurants to be open a minimum of two Julie Sproesser, RAMW years. In 2020, the following managing director.* categories will now have an eligibility deadline requiring nominees to be open a minimum of one year by December 31, 2019: Formal Fine Dining Restaurant of the Year, Upscale Casual Restaurant of the Year, Casual Restaurant of the Year, Favorite Gathering Place of the Year, and Service Program of the Year. The RAMMYS judges’ panel requested the eligibility change, following a majority vote by the panel. They deemed it was crucial to the significance of the awards as it allows past New Restaurant of the Year nominees and winners to maintain momentum and potentially be nominated for these five categories in the following year. This change will draw continuing attention to the overall performance of the restaurant, while maintaining a fair playing field in the judges’ consideration of all award finalists. DRN: There’s definitely a lot of work that goes into preparing for this stellar annual event. Can you give us a sense of the breadth of effort invested to make each RAMMY Awards a success? JS: The RAMMYS are the biggest industry event for the region and for the restaurants and individuals who work so hard all year long to offer incredible hospitality to their guests. It is our honor and pleasure to create a celebratory night for operators and professionals to come together and toast to a successful year. The planning process leading up to this 2,500+ attendee event is about 9 months in the making with many moving parts; it’s a great platform for sponsors to align their brands and engage with the local industry. Navigate to https:// *Photo by Anthony Torres, Eatery Pulse Media.

28 District Restaurant News

2020 RAMMY Awards | Finalists announced The 2020 Honorary Milestone RAMMY Award Winners (already selected) • Mrs. K’s Toll House (90 years) • Rocklands Barbeque and Grilling Company (30 years) • Vace Italian Delicatessen (44 years)

Duke Zeibert Capital Achievement Award Winner (already selected) • Randy Norton of Great American Restaurants

Joan Hisaoka Allied Member of the Year • Coastal Sunbelt Produce • Congressional Seafood Co. • Ecolab • Saval Foodservice • TriMark Adams-Burch

Regional Food and Beverage Producer of the Year • Arcadia Farm • Atlas Brew Works • Ayrshire Farm • Bluejacket • Logan Sausage Co.

Employee of the Year • Yesenia Neri Diaz, Espita Mezcaleria • Isael Granados, Roofers Union • Yasmin Orozco, Taco Bamba Taqueria – Springfield • Kyare Turner, Right Proper Brewing Co. • Jose Ventura, Rasika

Manager of the Year • Jamal Flowers, Rocklands Barbeque and Grilling Co. – Alexandria • Charlie Idol, Mission Navy Yard

Rahul Vinod and Sahil Rahman of RASA. Photo by Rey Lopez

• Rizza Leguro, Founding Farmers Tysons • Jeremy Mancuso, Old Ebbitt Grill • Bethany Wagener, Alta Strada – Mosaic

Service Program of the Year • Joe’s Seafood, Prime Steak & Stone Crab • Ristorante Piccolo • Rose’s Luxury • St. Anselm • The Red Hen

Casual Restaurant of the Year • Bantam King • CHIKO – Capitol Hill • Duke’s Counter • Little Pearl • Stable

Upscale Casual Restaurant of the Year • Centrolina • Chloe • Maydan • Poca Madre • Unconventional Diner

Rising Culinary Star of the Year • Marcelle Afram, Maydan • Faiz Ally, Poca Madre • Angel Barreto, Anju • Jocelyn Law-Yone, Thamee • Yuan Tang, Rooster & Owl

Pastry Chef of the Year • Caitlin Dysart, Centrolina • Olivia Green, Rooster & Owl • Katherine Thompson, Thompson Italian • Meagan Tighe, Trummer’s • Paola Velez, Kith/Kin District Restaurant News 29

Favorite Fast Bites of the Year • Call Your Mother Deli – Park View • Kuya Ja’s Lechon Belly • RASA • Shouk • Sloppy Mama’s BBQ

Formal Fine Dining Restaurant of the Year • Gravitas • Pineapple and Pearls • Rasika West End • The Conservatory at Goodstone Inn • Three Blacksmiths

New Restaurant of the Year

South American Celebration. Photo by Estadio.

Wine Program of the Year • Clarity • Field & Main • Primrose • St. Anselm • The Wine Kitchen – Frederick

Beer Program of the Year • B Side • Caboose Brewing Co. – Vienna • Franklin Hall • Roofers Union • Sweetwater Tavern – Centreville

Cocktail Program of the Year • China Chilcano • Colada Shop – D.C. • Officina • Royal • Service Bar

30 District Restaurant News

Favorite Gathering Place of the Year • Brookland’s Finest • Lapis • Quarry House Tavern • Stomping Ground • The Salt Line

Upscale Brunch of the Year • Bindaas – Cleveland Park • Estadio • Seasons at the Four Seasons D.C. • St. Anselm • Trummer’s

Casual Brunch of the Year • All-Purpose Shaw • Casolare Ristorante + Bar • Liberty Barbecue • Pearl Dive Oyster Palace • The Tavern at Ivy City Smokehouse

• Anju • Cane • Emilie’s • Punjab Grill • Rooster & Owl

Chef of the Year • Matt Baker, Gravitas • David Deshaies, Unconventional Diner • Haidar Karoum, Chloe • Ryan Ratino, Bresca • Kevin Tien, Emilie’s

Restaurateur of the Year • Victor Albisu, Poca Madre, Taco Bamba Taqueria • Bo Blair, Georgetown Events (The Bullpen, Due South, Jetties, Millie’s, Surfside) • Mark Fedorchak, Stephen Fedorchak, and Brian Normile, The Liberty Tavern Group • Yama Jewayni, Katsuya Fukushima, and Daisuke Utagawa, Daikaya Group • Aaron Silverman, Rose’s Luxury, Pineapple and Pearls, Little Pearl

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Profile for Eatery Pulse Media

District Restaurant News | Spring 2020  

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