As communities across the United States grapple with the spread of COVID-19, the attorneys at Marcus & Boxerman remain dedicated to serving one of the industries most impacted by this pandemic—the restaurant and hospitality industry. We continue to advise our clients remotely and have identified strategies that hospitality-focused business should adopt in these unprecedented times:
- Stay Informed. Illinois has closed all in-person dining at restaurants and bars until March 30, 2020, limiting restaurants to curbside pickup, carry-out, and delivery orders. The order also mandates that restaurant employees and customers maintain social distancing in these establishments. Federal, state, and municipal governments are considering various forms of relief packages, while business associations continue to lobby governments to provide immediate assistance to business owners. For example, the federal government just announced that taxpayers can delay paying income tax on as much as $1 million in taxes owed for up to 90 days past the tax filing deadline. Given that the news is moving quickly on so many fronts, we urge you to stay informed to ensure you make the best decisions for your business.
- Manage Your Finances. If your business is short on cash, use credit where you can, or delay expenditures. Postpone any new marketing initiatives, capital improvements, remodeling, or new openings. Also, determine whether the pandemic triggers a “force majeure” clause in the contracts that affect your business. Stay informed as to the availability of small business loans as a result of the COVID-19 pandemic.
- Be Proactive—Talk, But Don’t Sign. Start a discussion with your banker, landlord, and franchisor regarding your ability to make upcoming payments, but be wary of signing any documents now, especially those that saddle you or your business with new or increased obligations. Although it hasn’t happened yet, it is likely that federal and state governments will soon arrange for low-interest loans or provide other financial relief to small businesses during this difficult time.
- Seek Franchisor Relief. If you are a franchisee, ensure you understand what your franchisor is doing to support its franchisees. Some franchisors are already helping ease the financial strain on their franchisees by delaying payments royalties and advertising fees, or waiving interest on late payments for a period of time. Franchisors are also implementing temporary brand standards to promote social distancing, allowing greater flexibility in operating procedures, and providing other assistance to their franchisees. Make sure you understand what your franchisor is doing to help its franchisees and ask for flexibility or relief when you need to.
- Support Your Employees. Ensure your employees understand that you are doing all you can to support them, keep your business running, and make good decisions for the long-term viability of your business and their jobs. If you have to cut hours or even place employees on unpaid leave, advise your employees to apply for unemployment. Consider giving your employees whatever resources you can realistically provide, because once your businesses are running at full capacity again, you’ll likely want them to resume in their prior positions.
We strongly recommend that business owners in the hospitality industry take time to plan how they will conduct their business over the coming months. If you have any questions about how to address the challenges facing your business or need our help, contact us at (312) 216-2720 or firstname.lastname@example.org.