After suffering through nine months of unpredictable (and often unimaginable) developments, restaurateurs’ shockability has presumably waned to levels where anything short of a flying pig would draw a yawn. But these recent developments might still drop a jaw or two. See for yourself.
Joe Biden has a restaurant connection
The complexities of running a restaurant aren’t unfamiliar to Joe Biden, the president-elect revealed on Tuesday. The mystery, he said, is why anyone would voluntarily take on those miseries.
The Democrat explained during a virtual roundtable that the father of his first wife operated a 24-hour diner during the marriage, which was cut short by a car accident that left Biden a widower with two young sons (a daughter, 13-month-old Amy, was also killed in the collision.) Biden suggested that 24-hour service required almost 24 hours a day of agita to keep the venture in operation.
“One of the things I learned was that I never wanted to be in the restaurant business,” Biden said during the virtual roundtable, which was convened so he could hear firsthand how restaurant operators and employees are faring during the pandemic.
Who spoke on the industry’s behalf?
To get an unvarnished account of restaurants’ challenges during the crisis, Biden’s transition team reached out to someone from an industry association to participate in the roundtable and serve as a proxy of sorts for all operators. That had to be someone from the National Restaurant Association, right? Isn’t that group synonymous with the industry as a whole, its very face in the political arena?
Apparently not in the minds of Biden’s handlers. They opted instead for Dan Jacobs, co-owner of the DanDan restaurant in Milwaukee and an active member in both the Independent Restaurant Coalition (IRC) and its Milwaukee chapter. Jacobs argued in favor of the Restaurants Act, a piece of legislation championed by the IRC. The measure is supported by the NRA, but the latter has its own recovery “blueprint.”
The association likely agreed with everything Jacobs had to say, since he spoke so forcefully on the industry’s behalf, but the absence of a representative in what was likely the president-elect’s first fact-finding mission on industry conditions was an eyebrow-raiser. Is the star power of IRC’s membership roster tipping attention away from the industry’s most powerful advocate in Washington?
(Full disclosure: Restaurant Business is the official media title of the National Restaurant Association).
The Cheesecake Factory fibbed
Or at least that’s the assertion of the Securities and Exchange Commission (SEC), which disclosed today that it had investigated the high-end operator for allegedly misleading investors on the company’s financial condition early in the pandemic. The agency accused Cheesecake of declaring in late March and then again in early April that it was making enough from takeout and delivery to sustain operations at least in the short-term. In reality, the SEC said, the company was losing $6 million a week and had only enough cash on hand to sustain operations for 16 weeks. But, the agency continued, Cheesecake told the truth to potential financial partners, and didn’t reconcile how it could be chugging along when it simultaneously said it couldn’t pay its restaurants’ April rents.
Cheesecake hasn’t admitted or denied any wrongdoing. It agreed to settle the matter by paying a $125,000 fine, or less than one of its restaurants collected in a normal week back in pre-pandemic days.
The real spine tingler: The SEC indicated that it might go after other public companies for putting a smiley face on situations worthy of a blues song.
A federal relief package is a possibility—albeit slim
A week ago, hardcore politicos would have laughed any innocent out of the swamp for suggesting a new federal aid package might yet be hammered through the current Congress. Yet here we are with a bipartisan proposal on the table and even Mitch McConnell, the suspected model for Dr. Seuss’ Grinch, showing a willingness to consider it.
The measure also has the support of Nancy Pelosi, Chuck Schumer and President-elect Biden, along with 25 rank-and-file Republicans and an equal number of Democrats across both chambers of Congress. Plus, there’s a considerable tailwind to the proposal: Congress has to pass some sort of spending measure if the government intends to stay in operation beyond Dec. 11, when it runs out of funding. Tacking on a proposal for a measly $908 billion in federal aid would be the Washington equivalent of rounding up a tip to the nearest whole dollar.
Passage of even a slimmed-down package would be the best holiday present the restaurant industry could hope to receive. But it would be the equivalent of getting a Huffy bike instead of a Schwinn. In its current form, the relief package would provide only $288 billion in small-business aid, and that includes a re-up of the Paycheck Protection Program. The first time around, that program alone was funded with $670 billion.
Still, denizens of what President Trump bashes as swamp country say the chances of a measure being ramrodded through Congress are still lower than the odds of the Jets winning the Super Bowl. But the chance is there, and that’s a surprise of federal-deficit scale.