Last week, we provided a list of resources for restaurant/frozen yogurt shop owners and discussed predictions for the impact of the coronavirus on the restaurant industry. This week, we’d like to provide an update on what’s going on in the world of frozen yogurt and how new laws could help shop owners.
As of Tuesday, March 31, thirty two states in the US, Washington DC and Puerto Rico have issued stay at home orders. Some metro areas in states without state at home orders have issued stay at home orders. It is estimated that 80% of Americans are under some form of lockdown. Under stay at home orders, people are expected to stay at home and to only go out for food and essentials. Non-essential businesses are expected to close, though what’s considered essential varies somewhat by state/area. In most cases, restaurants, including frozen yogurt shops, have been allowed to stay open for takeout and delivery.
Let’s start with the impact. New research from the National Restaurant Association shows that restaurants nationwide report an average year-over-year sales decline of 47%, 44% have suspended operations, and 70% have laid off staff. Further, “more than 3 million restaurant jobs and $25 billion in industry sales were lost during the first 22 days of March.”
The good news is that the Coronavirus Aid, Relief and Economic Security Act (CARES) has been passed and includes:
- Payroll/rehiring incentives: Small businesses (businesses with under 500 employees) are eligible for government-backed, unsecured loans that can be used for salaries/wages, severance pay, health care benefits, state or local payroll taxes and other payroll related expenses.
- SBA loan forgiveness
- Various tax breaks, e.g., the employee tax retention credit, writing off qualified improvements to facilities, delays in tax filings and payments, etc.
For more details, please see CARES Act Provisions.
While business interruption coverage from insurers typically requires physical damage, restaurants and other businesses are suing insurers to seek coverage for losses due to the pandemic.
We’ve seen froyo shops donate their froyo to hospitals, grocery store employees, assisted living facilities and others, or offering free froyo to the community. Some shops are using this down time to plan and clean, including to work on new menu items and develop new flavors. Others that are still open are cutting hours and getting creative, including having employees make froyo deliveries, offering family froyo packs, and partnering with other local businesses on contests and promotions.
We will continue to monitor the news and provide updates.
