Should we take the Tennessee Pledge to go out of business within a few days of when we reopen? Right now, everyone's talking about how exciting it is to open up, to be back at work, to start generating some business again. I can't blame anyone. We don't want another Great Depression to happen and that requires going back to work.
There's only one problem: To run a business in this era of Covid is a nightmare. We often talk about how small business is the backbone of America. The whole Payroll Protection Plan was meant to help them. Very well intentioned, for certain. But how do you run a business if the business can't be run for a profit?
As a part owner of a couple of restaurants, I have been itching to hit the ground running on the reopening. I talk about the restaurants not to promote them, but to show you what small business is like. I won't even tell you their names, lest you think that is the gambit. I just want to tell you what awaits you and a way that you can make money with this nightmare of a new regimen.
First, no one really knows any of the rules. But we got a glimpse, maybe the best glimpse, by examining the Tennessee Pledge, the most comprehensive and thoughtful set of regulations for reopening a restaurant, courtesy the Governor, Bill Lee.
It's safe and it's healthy for the customer, but it's simply not viable for the majority of restaurants.
Let me give you specs.
First, when a customer comes to your restaurant, you have to ask each person whether he or she has been in close contact with a confirmed case of Covid-19, whether they have a cough, shortness of breath or a sore throat, and whether they have had a fever in the last 48 hours.
Then you have to take their temperature.
Over 100.4, no entrance.
Once they get through that pleasant gauntlet, they will be seated by masked and gloved employees and be seated -- at least at one of our places, the fancy place, at one of four tables. That's all we can put in because the tables have to be six feet apart. So much for our 11 tables, including our big ones. No problem You can't have more than six people at any table anyway.
Make it up at the bar?
Nope.
No bar.
Closed.
The biggest profit center, closed until the state gets collectively healthier.
Two words define this fiasco: Check, please.
No, not the one you can give customers if they get through the gauntlet and find a table. I'm talking about the check you will have to write back to the government if these rules are adopted in New York.
Now, I hear you: Make it up in takeout and delivery.
But you have to understand unless you have the scale to make great food at reasonable prices and have drive through lines and organized pick up like Chipotle (CMG) , which we ordered from today because it is Cinco de Mayo, it will be very difficult to make money. We have to almost triple the check size to make money and who can afford to pay? The only good news is, the physical distancing in the kitchen cuts your staff in half, but trimming will never make up for elimination of seven tables including all of our big ones.
Now what's the real takeaway here? These rules are fantastic for those who have the balance sheet and the wherewithal. In fact, they can take over the world. I can see how a Starbucks (SBUX) can be on every corner with the new low rents because most small businesses will never be able to afford to compete for space. I see how a Darden (DRI) will be able to pick and choose malls and become one of the few sitdown places you can go to. You can buy either stock, if we all take the Tennessee Pledge.
Oh, and I am not giving you the half of it. Some states are insisting on automatic doors. Others are going to require air flow changes because Covid droplets have been known to be blown by air conditions from one table to another.
About 13 million people work in the restaurant industry. I have no idea how many will be left if we all take the Tennessee Pledge. But I know it won't be many.
What's the antidote?
Why, like everything else, it's the vaccine.
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