After months of complying with CDC guidelines and citizens receiving their vaccinations, the State of New York has been granted access to reopen. However, there is a fine line, especially in the busy city of New York, about how we go from social distancing and wearing masks to the type of “normal” we were familiar with in 2019.
It is expected that those individuals that have yet to be vaccinated continue wearing masks under the CDC’s guidelines. At Meister Seelig & Fein LLP’s Hospitality Group, we understand how restaurants and businesses specializing in hospitality can prepare to adapt to a new normal.
While the reopening of the State and City is an exciting time for restaurants that have been anticipating reopening their doors and welcoming guests back, there is a large group of people who remain cautious. There is a level of confusion and uncertainty when customers walk into stores– Should I wear a mask? Do I need to even if I am vaccinated to be on the safe side? There is also no requirement to prove you have been vaccinated, which I think leaves some people feeling uneasy and hesitant to trust those around them. It’s understood that you can still get Covid even if you have been vaccinated, so doing everything possible to make customers feel safe is important. For those spaces that are open to full capacity, I think it is smart for the entire staff to continue wearing masks to ensure customers feel comfortable. We need a period of transition to get back to what we think normal should look like.
The next key issue are the lessons learned from the ferocious high demand for grant money from The Restaurant Revitalization Fund. Almost all of my clients whom I advised in applying, have received money and are on their way to making smart business decisions with these funds. With the Replenishment Act being proposed for an additional $60 billion for the RRF, I continue to encourage eligible businesses to apply. I can’t emphasize enough, whether it’s our firm or one of the many quality firms that specialize in restaurant and hospitality, invest the money to get the help to guide you through the process. It will pay for itself many times over.
The next item is, once you have the funds – how to use them wisely. We all know that these funds can prove to be extremely beneficial as businesses in NYC reopen to full capacity. This can be confusing as the City threatens to take back outdoor space that isn’t being actively utilized by restaurants who have begun to move the core of their operations back inside to dining rooms. Maximizing outdoor spaces for the warmer weather is smart, but don’t put all funding towards this. You need to hedge your bet with the chance that the outdoor dining spots may be taken away with the election of a new Mayor in New York City.
Among the really interesting trends to follow as we find this new normal, will be the tracking of the take-out and delivery growth that came from the Pandemic. It certainly remains a huge asset for the foodservice industry as full capacity indoor dining is welcomed back. I think it may need a fresh look, which starts with considering to invest in your own employee delivery team. As I work with my client restaurants, I am convinced that the issue over driver/delivery liability and how those workers are paid with a 1099 is going to be a growing concern. I encourage my restaurant clients to let me look at their contracts with third party delivery providers so I can point out the risks. It’s all about transparency with language as clear as possible for the client restaurants and third-party delivery provider.
The most pressing amongst matters that I am hearing about, is rebuilding the restaurant staff. For restaurants eager to welcome employees back, many of my client restaurants are incentivizing existing employees by referrals. Additionally, giving bonuses to new employees if they stay for more than 90 days is a smart business decision. I encourage clients to use RRF grant money to fund those financial incentives and bonuses. It has to be a priority, because if you don’t have staff to serve your customers you can’t take advantage of the beautiful summer weather and customers enjoying both your indoor and outdoor space while getting quality service.
With new protocols comes a fresh new look at real estate opportunities. With my expertise in hospitality, it is worth looking at opportunities you may have overlooked in the past: finding a hotel venue for your next restaurant. Many hotel operators are looking for a “signature” restaurant that they can position as a centerpiece in their marketing as they get ready to re-open and welcome back their business and tourist guests.
I’ve engineered a number of these hotel/restaurant collaborations and the key is partnering with a hotel group that is both a brand and financial match. With these partnerships, there can be built-in customer base and a great restaurant in a hotel can give the hotel life. Of course, there are many other considerations in entering into a hotel deal, whether it’s a lease or management agreement, but there are a lot of opportunities out there.
New protocol also means keeping an eye on local legislation that can impact a restaurant’s operations. The NYC Council recently passed two bills that restaurants have been advocating for to get some relief. The first is a regulatory reform bill that asks businesses to first comply before the imposition of a penalty. In many cases the violations are errors of omission rather than commission as the violation was something restaurant owners were not properly educated on. Restaurants have been getting burdened by unnecessary fines and they should not be further burdened by having to spend time and money fighting or defending rather than putting effort into fixing or remedying. The second bill establishes an amnesty program for fines where businesses will have 90 days to pay up all the things they owe at a 75% discount for violations issued from the start of Pandemic, and a 25% discount for fines going back to 2013.
I know it’s a lot to think about. But remember we are here to help you make sense of how to navigate and create your “new normal”.
