InTouch | July 2020

INtouch

PO Box 7577, Columbia, SC 29202

JULY 2020

PRSRT STD US POSTAGE PAID COLUMBIA, SC PERMIT 168

UPCOMING EVENTS

Currently leasing your restaurant?

MARKETING & OPERATIONS CONFERENCE Postponed until March 22-23, 2021

Consider re-negotiating your lease amid COVID-19.

COLUMBIA LODGING ROUNDTABLE July 16

FLORENCE AREA CHAPTER MEETING July 21

Hospitality leaders golf tournament October 12 Visit SCRLA.org for a full list of upcoming events + details.

Hospitality Leaders Launch the South Carolina Palmetto Priority In collaboration with South Carolina’s hospitality leaders, Governor Henry McMaster announced the South Carolina Palmetto Priority during a press conference today. The Palmetto Priority is a restaurant commitment aimed at instilling confidence with restaurant-goers as they choose dine-in service at restaurants across the state.

The formal commitment, which will be overseen by the South Carolina Restaurant and Lodging Association, demonstrates the precautions a restaurant is taking to prevent the spread of COVID-19 with the pledge of a clean and safe operation for both customers and employees. Restaurants choosing to take part in the Palmetto Priority will: • • •

Complete a checklist of operational assurances as outlined in the Restaurant Reopening Guidelines Participate in required free online education, and Participate in a DHEC limited scope food safety inspection

Restaurants who successfully complete the checklist will sign a commitment and earn the program’s endorsement—a seal to be posted in the restaurant’s front window.

Guests may visit the Palmetto Priority website to review commitment standards, view a list of participating restaurants, and provide feedback through short online survey. Guests may file an online report if they experience a participating restaurant not honoring the commitment.

To learn more about the South Carolina Palmetto Priority, please visit PalmettoPriority.com.

If you are not bringing in the revenue you did this same time last year you may want to consider renegotiating your lease.

But before you approach your landlord with a lease renegotiation request, you will want to determine your desired outcome and develop an action plan. Depending on your knowledge of lease terms and conditions you may consider consulting with a tenant-broker, a person that specializes in representing your real estate interests and legal counsel to determine your options.

Build your strategic plan.

• Do your research.

• Crunch the numbers.

• Leverage your track record.

• Know the current leasing market.

• Assess your relative leverage and attendant risks.

• Discuss the future.

Now that you have a strategic plan it is time to approaching the landlord. First od it in. a timely manner. If you already have a good relationship with your landlord should help to start the uncomfortable conversation. Use this opportunity to remind them that you’re a valuable tenant who is trying to find a solution to keep your business alive. Maintain confidence and professionalism at all times. Present your well-thoughtout plan and reiterate your desire to find a solution for both your restaurant and their investment.

Once you’ve had a chance to discuss specifics, send a follow up email detailing the salient points of the discussion. Documentation is very important. If you are successful, a lease amendment should be executed by the tenant and landlord to memorialize the agreed upon solution. This amendment should specify that any changes writing and signed by both parties. It’s important to make sure that any changes to your lease – especially with respect to any rent payments – be documented. It is recommended to have legal counsel review any changes to the lease before signing anything that may impact your lease terms.

What if your landlord turns you away and rejects your request? First and foremost, this is a negotiation and you must be ready with a backup offer. It may take several tries to reach a solution. If you have trouble reaching an agreement, you may want to seek outside assistance from a tenant broker, a person that specializes in representing your real estate interests. As mentioned earlier, you may want to speak with one for insight before you begin the negotiation process.

Whatever solution you and your landlord agree upon, you should get confirmation that your landlord is ready to document the changes in a lease amendment. You should also get confirmation that your landlord will not issue any default notices in the meantime or during the period of time you are negotiating. It is recommended you retain legal counsel for this process.

Upcoming ServSafe Manager Classes

Snap-Back!

Toolkit

ReOpening Resources foodie.sysco.com/snapback

Bluffton/Hilton Head - July 8 Charleston - July 9 Columbia - July 14 Myrtle Beach - July 15 Greenville/Spartanburg - July 22 SCRLA members receive a 20% discount using the code SERV2.

To sign up, visit AtlanticFoodSafety.com

Acceptable Proof of Spending • Verification of full-time or full-time equivalent employees paid and their rates

How to Track Loan Expenses for PPP Receiving your Paycheck Protection Program (PPP) loan doesn’t mean the hard work is over. For the loan to be forgiven, you must spend the funds on qualifying expenses within an approved period after the disbursement—and carefully track that spending. Providing detailed and specific information on how your PPP funds were spent will be vital to having your lender forgive your loan.

How Do I Track Eligible Expenses?

The federal government has not released guidelines for tracking eligible expenses. Still, you eventually will have to submit a loan forgiveness application and supporting documentation to your lender.

Each lender may have different requirements for what it considers to be acceptable proof of spending. There are several different methods you can use to track eligible expenses in preparation for applying for PPP loan forgiveness. The most common way is to track using accounting software. But if you do not have existing accounting software do not want to alter your chart of accounts you can a spreadsheet program, like Excel or Google Sheets. If you choose to use a spreadsheet, here are a few tips to help keep you organized.

Make Separate Tabs for Each Expenditure Category This is where you will post each transaction in detail. Make sure to include the date, vendor, amount, and any identifying number with each transaction so it can be tracked back to your accounting system and bank account easily.

Make a Summary Tab That Shows Your Loan Income Make sure the tab lists summary numbers for each expenditure category as well as a net amount. You should be able to link the summary number cells to the total on the detailed category pages to eliminate manually transferring the numbers. This will make it easy to see how much you’ve spent in each category in comparison to the whole PPP loan disbursement amount. This summary sheet can act as your profit and loss report when it comes time to apply for loan forgiveness.

Create a Formula to Track Expenditures On your summary page, create a formula that will tell you how much of the expenditures are payroll-related and how much are other expenditures. This will help you monitor your payroll costs and make sure you’re following the rules for loan forgiveness.

A spreadsheet might be easier to use and manage than your accounting software when it comes to tracking PPP expenses. However, keep in mind that manual entry can be time-consuming, and spreadsheets are more prone to entry errors so double check your numbers. Make sure all entries are accurate and as detailed as possible. Being vague in this area will not win you any points with your lender when you apply for loan forgiveness.

July 2020 • SCRLA.org

• IRS payroll tax filings • State income, payroll, and unemployment insurance filings • Verification of payments made for mortgage or lease obligations and utilities

UofSC Master’s Program Offering Online “Test Drive” This Fall Mapping Eligible Expenses Under the PPP When tracking expenses for the PPP loan forgiveness as determined by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), make sure to look at: • Payroll costs: Salary, wages, commissions, or tips along with employee benefits including vacation, parental, family, medical, or sick leave as well as health care benefits and premiums, and retirement benefits.

• State taxes • Sole proprietors and independent contractors: Wages, commissions, income, or net earnings • Interest on mortgages: Obligations must be incurred before Feb. 15, 2020 • Rent: Lease agreement must have been effective prior to Feb. 15, 2020 • Utilities: Service must have begun before Feb. 15, 2020 Will I Have to Pay Back Some of the Loan?

Maybe. The idea behind the PPP loan for small businesses is to help people stay employed and keep firms from going out of business. As such, you will be required to prove you spent 60% of the PPP loan proceeds on payroll-related expenditures.

Restaurant

Powerful. Scalable.

Feature-rich point of sale.

The University of South Carolina’s Master of International Hospitality and Tourism Management (MIHTM) degree program is offering an opportunity this fall to help industry professionals work on their professional development by earning master’s degree credits in a flexible format.

MIHTM classes will be available in both online and on-campus formats this fall to provide accommodating learning options amidst COVID-19. Students can complete courses from anywhere in the world and around their schedule.

For anyone who isn’t ready to commit to earning their master’s degree just yet, alumni and industry professionals can take a “test drive” of up to two MIHTM classes without enrolling full-time in the program. The classes earned as a non-degree seeking student will count towards a master’s degree should students decide to enroll in the program later.

The University of South Carolina’s School of Hotel, Restaurant and Tourism Management has risen in the rankings for three years in a row and is now recognized as No. 7 in the U.S. for hospitality and tourism management.

heartland.us/restaurant A Global Payments Company ©2019 Heartland Payment Systems, LLC

Featured MIHTM classes available this fall, include: Hospitality Marketing and Social Media, Hospitality Finance Methods, Advanced Club Management, Tourism Information and Technology Issues, Advanced Meeting Management, and Hospitality Human Capital and Talent Management.

For more information, contact the MIHTM Program Director Scott Smith at ssmith1@mailbox.sc.edu or visit www.sc.edu/hrsm.

If you spent any of the loan on things determined to be ineligible for forgiveness, you may be required to pay those amounts back.

Bottom Line When it comes to your Paycheck Protection Program loan being forgiven, it will all come down to the details. If you don’t track your spending well or at all, your loan may not be forgiven. However, if you have tracked your eligible spending carefully and can provide backup documentation, you may not have to repay any of the loan.

Let’s get social! @SCRestaurantandLodgingAssociation

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WE’VE GOT YOUR BACK. AND FRONT OF HOUSE.