Restaurant COVID-19 assistance: reading the fine print

By CLOEY CALLAHAN
Posted 2/3/21

At what point does a restaurant owner continue accumulating debt or decide to close their doors for good? That is the question owners Jenifer Flynn and Lani Ricozzi of Barking Goose keep asking …

This item is available in full to subscribers.

Please log in to continue

Log in

Restaurant COVID-19 assistance: reading the fine print

Posted

At what point does a restaurant owner continue accumulating debt or decide to close their doors for good? That is the question owners Jenifer Flynn and Lani Ricozzi of Barking Goose keep asking themselves.

While they were eligible for the first round of the Paycheck Protection Program loan and the Economic Injury Disaster loan, they haven’t been eligible for a good portion of other funds. The Restaurant Recover Fund, which restaurants could begin applying for on Monday, January 11, offers approximately $3 million in reimbursements grants for up to $5,000 for eligible businesses.

While the fund will be helpful for some, Barking Goose will not be eligible for the simple fact that they haven’t been in operation for over a year since the start of the pandemic. They opened their doors in May of 2019, while the fund states you must have been in operation on or before March 1, 2019.

When they originally created their restaurant model it was to create a community gathering place where you could order from the cafe menu, grab a craft wine or beer and browse through a book. Their idea of creating a community gathering place came tumbling down once the COVID-19 pandemic hit.

They quickly switched gears to offer take out and sell more books – and even added puzzles, a newfound quarantine hobby for some.

“Things were going along quite well we thought,” said Flynn. “We were doing okay. We weren’t even 10 months in when the pandemic shut things down. Suddenly you go from a gathering community type place to gathering is no longer the right thing to do.”

While they did make the shifts that they did, Flynn said it still hasn’t been enough to keep things where they were. They were spending more money on books and puzzles and saw their profitability decline.

The second round of the Paycheck Protection Program loan requires a 25 percent reduction in any quarter. Flynn said the half retail half restaurant model has led to some uncertainty on where they are able to receive funding. When they break down their numbers, they see that the beer and wine sales are down 50 percent, food sales are down 30 to 40 percent but their book sales help overall, however it is not as profitable.

“We’re getting caught in between these numbers games,” said Flynn. “So many people are putting out so much money – you had to revamp to buy outdoor things and for us we bought more books but they’re less profitable.”

Flynn wondered why they settled on a 25 percent reduction for eligibility.

At the same time, they are trying to work with their landlord for rent relief, which ultimately gets tacked onto the end of the lease agreement for them.

“With small businesses, you can stay in business because these things keep you afloat – but at what point are you incurring too much debt to do so and is it useful to have this business open and is it meeting a need that a couple of years ago you saw a need was there,” asked Flynn. “Clearly now, it’s hard to say. You get hopeful with vaccines and that sort of thing. Now there’s been such a delay in the vaccines arriving.”

Flynn called it a challenging feat to navigate owning a restaurant and business during the pandemic. While she does have help from the Small Business Administration and her accountant to navigate what loans they’re eligible for, it sometimes isn’t enough.

Also at the same time, they have to look out for their own health and safety. In December, Flynn and Ricozzi both caught COVID-19 themselves, which led to a two-week closure in one of their most profitable times of the year with the holidays. With the closure, they did half of their sales that they did in November and weren’t able to pay their salaries.

“Everyone talks about oh there’s certain places you can get it or not get it,” said Flynn. “Anytime your mask is down you’re at a risk of giving or getting.”

While they operate with their masks on, their customers have their masks off while they are eating or drinking.

Fortunately, someone set up a Go Fund Me for the Barking Goose during the time of the closure, which raised almost $7,000.

“We’re trying to keep going,” said Flynn. “We don’t want to disappoint people who helped us so we’re doing our best to stay in business. It’s what we want.”