YouBet said:

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Not that pay much attention to the burger scene anymore but surprised by all the Jake's hate. It was widely well liked at one point. Did something change along the way?

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A double cheese burger at Jake's is $7 before you get a drink and fries. Fries or tots is another $2 and a drink is $3. $13 after tax for a drive thru quality meal. That's why. You can go to Keller's for half that price for the exact same meal.

Also, I swear someone told me Lizard Lounge was going to close down in a couple of months even before all this virus stuff started up.

hph6203 said:

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Also, I swear someone told me Lizard Lounge was going to close down in a couple of months even before all this virus stuff started up.

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I'd heard that the owner ended up renewing his lease back then, but now It's done.

Yeah I don't want to sound too insensitive as I know the trials of small businesses -- but if you're closing doors after 45 days then you likely weren't long for this world anyways.

Especially when you see that many of these places didn't even attempt curbside/delivery or go after any grants/loans.

Most of these places were either on their last legs, refused to adjust, or didn't attempt to adjust.

That being said, I won't be saying the same thing about places shuttering in the coming months.

Right. I think in a month or two of operating at 25% or even maybe 50% capacity...you are likely going to see a fairly large round of closings on some restaurants that 6 months ago we would have thought to be around for years / decades to come.

I am not familiar with restaurant / hospitaltiy financials but I would assume most have a little bit of playing room but pretty soon owners will have to decide how much they are willing to pay out of pocket vs shut down.

At the same time it will be interesting to see how bullish some are on the bounceback.

Hoffbrau couldn't work out a deal because there's already somebody lined up to pay more for the spot. So at least some lease-holders are bullish about the long-term.

Yea it's very tough to operate with the 25-50%. You still have to staff relatively expensive positions in the back of house for basically a third of the revenue. Regarding curbside, the to-go Ware is expensive! It's another added expense that is unexpected and I'm sure since demand for those products is through the roof there is some price gouging occurring from suppliers. That's why a lot places aren't giving napkins and plastic ware. Anyway to cut expenses. Unfortunately the spots that use inexpensive frozen food that is processed have a much higher chance of surging versus the from scratch concepts that provide more jobs and better quality.

Bird Cafe goes down.

Someone that is smarter than I am on the subject... 45 days in to a shelter-in-place. Obviously things are bad, but most people I've talked to who have made a significant effort to secure the PPP loan (ie. they kept up that the big banks weren't handling things well and looked to other outlets) have been funded or are in the process of being funded.

So how does what I would assume a fairly healthy ownership group (Rodeo Goat, Flying Fish) not be able to make it 45 days, especially with things on their way to opening back up?

I'm trying not to be insensitive about it - this crisis is going to absolutely destroy small businesses this year I have no doubt... but in just 45 days for some of these places to be buckling, I just feel like there has to be -- pun intended -- some kind of "significant underlying condition" for a few of these places to be shuttering.

What am I not seeing? An issue with the PPP not covering enough of the rent?

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An issue with the PPP not covering enough of the rent?

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This is part of the story.

Costs are also way up with to-go only. Especially with TABC requiring single serve liquor for takeout drinks.

Also, many smart owners know when the hole is becoming too big to dig out of.

You have to imagine that in places like Bird revenues went to zero - or near it, with only takeout propping things up. You probably aren't even making enough to cover the labor it takes to generate those sales, let alone any of the other fixed costs, like rent. If they got the PPP pretty early, they may have burned through a lot of it, and depending on furloughs, might be looking at huge impacts on the reductions built into the act and aren't willing to take on the debt, cheap as it may be. They probably just stared up at the huge mountain in front of them and threw in the towel. Hospitality and food service is just getting hammered by this.

Speculating/guessing here

A lot of these restaurants have many minority partners, many of whom probably also took a healthy haircut on their other investments and incomes. PPP will help you get by until mid-Summer, maybe, but still other items out there to pay, rent/utilities (partially covered by PPP), equipment leases, maintenance on the facility, debt service, etc. I don't know what interest rates are for restaurant lending, but I imagine they're much higher than more stabilized businesses, and may even be non-traditional debt where the lenders are less likely to forgive balances or payments.

Restaurant will either burn through PPP funds before "back to normal" and investors do not want (or are not able) to handle a capital call/loan, and restaurants are not able to source other credit/debt from institutions. Investors cut their losses, and managing partner has no other choice but to fold up shop. Minority investors may be able to handle the call, but possibly see better utilization in many other opportunities to place capital.

Other thoughts are "this just isn't ever going to get back to normal" and owners/operators never see the restaurants performing as they once were or even stabilizing, and are able to walk from non-recourse loans with their heads held high, egos in check, and just chalk it up to Corona.

Yeah I can definitely see a place like Bird Cafe also isn't positioned to do a lot of take-out/curbside, because most aren't going to drive into the heart of downtown to get food.

Based on their facebook page the last few weeks they've been doing 100 meals for free for the health care industry, so I guess just a case of they had a ton of food inventory and no one buying?

But if they went out and acquired the PPP loan, how exactly is that now going to work with closing shop? Do they pay back the loan?

I guess a case of them fiscally still being OK, but knowing what their rent is deciding that 3-4 months down the road there's no way they'll be able to stay afloat?

That makes sense.

Thankfully just a few trillion right now....

752bro4 said:

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But if they went out and acquired the PPP loan, how exactly is that now going to work with closing shop? Do they pay back the loan?

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PPP loans are not personally guaranteed, so you and I will be paying for it in the long run.

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That's what I was kind of hinting at though -- Bird's situation likely a little different because they own a few other restaurants in town that likely won't be folding -- but assuming they applied for an received the PPP loan and will now (depending on structure) be filing bankruptcy... (if they did PPP) did they potentially take those funds knowing full well they weren't going to stick around and will now try to keep those funds in bankruptcy debt protection?

Any funds that were not forgiven are taxable.

FYI, vast majority of people applying for loans didn't get anything.

Forgiven funds are not deductible

This restaurant service dine-in sector is in very sad shape. Even if they are open, media reporting only 90 % off of previously...very sad shape. I just can't see the end in sight.

https://www.msn.com/en-us/foodanddrink/foodnews/this-chart-shows-how-restaurants-will-struggle-even-after-they-re-allowed-to-reopen/ar-BB145NkW?li=BBnb7Kz

Really curious how this is going to play out in Dallas, specifically. We are a restaurant city. The biggest knock on Dallas is that there is nothing to do except to eat out. Arguable but that is a common perception even by many locals.

So, if any city's restaurant industry were to relatively recover it would be us. However, that is sketchy in the short-term. Many companies are not returning to work for several months (mine being one of them). If you work at a large company, think about the restaurants in your immediate vicinity that basically exist because of your company. Those places are going under if your company isn't going back to work in the very immediate future.

Naveronski said:

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FYI, vast majority of people applying for loans didn't get anything.

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If they didn't get anything in either of the first 2 rounds (second one still going on), then either they had some reason they weren't eligible or they didn't do the legwork. I'm guessing a lot of these places didn't apply and/or were with a big bank and didn't look elsewhere once it was obvious the big banks were overloaded.

I swore off Bird Cafe when they took their sweetbreads off the menu.

tysker said:

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For many restaurants, I imagine its not just a problem with the dinner but also the lunch. With people WFH, lunch crowds have probably died off completely and I would venture to say that the old 'power lunches' aren't happening at all. And with WFH, workers arent meeting up for a couple drinks and appetizers on the way home.

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The people I know in the restaurant business love the lunch crowd - people WANT to eat fast and are OK with a limited menu with smaller portions.

We may see a shift in the whole "networking lunch" dynamic. It's much easier to schedule a Zoom or Teams call and make personal contact than it is to schedule a lunch, drive, expense it, etc. This might cause a pretty dynamic change in the way networking happens going forward.

Fully agree with that. Just saying in some cases it's a decent low effort alternative. I prefer in person as well.

Fully agree with that as well. There's no substitute for face to face meetings.

RIP Dakota's Steakhouse in Dallas

Baptists sell land to owner stating they cannot sell alcohol. Place is built underground to not violate the agreement and to sell alcohol.

edit - not a favorite place of mine, but a cool place for an anniversary or what not.