Restaurant Leaders are Speaking Up About the Lack of Government Support for the Industry

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Rosanna Caira: There’s an increas-ing sense of frus-tration about the lack of detail as to when the restau-rant industry can re-open in Ontario and other parts of the country. What are your thoughts on how the differ-ent levels of
government are supporting the industry?

Charles Khabouth: I feel we’re being put aside for now. I went to Canadian Tire yesterday and there’s people everywhere and most people are without a mask. [Retail stores] are open and people are lined up to get in inside. [Restaurant operators] run the safest part of the industry because of the level of training our staff have and the amount of scrutiny we’re under from the health department and inspectors. We would be the safest [place to be] because people would be in a restaurant seated and not walking around — unless they have to go to the bathroom, they really have nowhere to go.

When you come into a restaurant, you’re taken to your table, you’re seated and, if you’re there for two hours, you’re not moving from that table. We are, by far, safer than having a few hundred people walking around stores, bumping into each other, walking this way that way. So, I’m not sure why we’re being penalized by not being able to open and not even being given a date or timeline or some kind of an idea — there’s no mention of timeline whatsoever.
And restaurants are not like a clothing store — a clothing store can just dust off its merchandise and open up. We’ve now been closed [more than] three months — it will take us a week to prep to be able to open. You have to have staff and you have to have your kitchen ready — it’s like opening from scratch at this point. Also, why hasn’t the government given us the opportunity we have with you today with this roundtable? It should be done in each province and city. Why hasn’t [Toronto mayor John] Tory asked us to sit at a roundtable and give them advice and our professional opinion on how and when to [re-open]? Nobody’s reached out to us — it’s the weirdest thing ever. If we don’t hear from the minister or the city, I’ve made the decision with my partner to open at least one or two restaurants the week of June 15 and we’ll deal with the consequences. Somebody has to take a stand and move forward. This is unacceptable at this point.

Nick Di Donato: I have to concur with Charles and it seems that we, as operators, have been ignored. I want to use a very specific analogy — a couple of weeks ago, the city [of Toronto] decided to draw circles in a park and allow people to sit in the park, within a circle and with social distancing. I look at that and say, ‘what are we doing here?’ I understand that people want to be outside, but we’re inviting them in areas that are not controlled. It’s not a natural course of action in those places. They’re not going to stay in place. There’s nobody to check their temperature. And now the city has to police it, so they become the police of the system they’ve created. Now, if they had allowed every restaurant in Toronto to open their patios, operators would be responsible [because] this is our livelihood. We’re accustomed to being under supervision or control from the government, with health regulations, with capacity controls — all those things I’ve been doing for 35 years in the business.

Michael Doyle: The most important thing we’ve been pushing in Vancouver is to meet with our local government and provincial government to try and impact change and get things moving. Vancouver’s mayor did meet with us, as an industry, and some of the senior restaurant operators in city. We’ve started opening and people who want to go out know restaurants are the safest out of all the industries that are trying to re-open — we’ve been doing this for a long time with health and safety.

People are excited about going out and the restaurants are busy. The capacity is an issue — it’s not going to help us make a lot of money with 50-per-cent capacity — so we’ve been working on increasing the size of the patios. A lot of cities have agreed with the restaurant industry about expanding the footprint of the patios, closing some of the streets down in certain areas, like Whistler, where they’ve expanded to give us more space to try and get back to a normal capacity. But I couldn’t agree more that we have to get the government to understand what the issues are. The rent is an issue and the government needs to realize that rent piece is a huge one. And then the people have an issue with the subsidy when that ends at the end of August (on June 17, the Federal government announced an eight-week extension). That’s a huge issue and we’ve talked about how we can help push the government to realize these issues.

Mike Hancock: We’re in a pretty unique position since nearly 70 per cent of our restaurants have a drive thru, so almost all those restaurants were able to maintain operations. The majority of our restaurants were able to do takeout as well, if they didn’t have a drive thru. We now have dine-in services opened up in [some provinces] — we have about 800 stores that actually have their dining-rooms open at a limited capacity. Obviously, similar to everyone in the industry, [restrictions] had a substantial impact to our business. We’ve really tried to go into new sales channels. Delivery has grown for us — we’ve pushed hard with the delivery [and gone from it] being almost non-existent to now being one of the biggest delivery players in the country.

Curbside is a big opportunity for us as well. Out west — Vancouver in particular — they’ve been pretty good in terms of getting permits approved quickly for patios and have been turning them around in a very short period of time. That’s probably a best practice that could be adopted everywhere because it’s going to be more important than ever to have patios at our restaurants during this time. Having that type of flexibility and expedited process is going to be really important for the entire industry. So, I would share that and encourage all provinces to give that a look. But, similar to everyone else, we’re now sort of in the recovery phase. As a corporation, we ultimately decided we weren’t going to take the subsidy, but it has helped our franchise owners tremendously and it allowed them to maintain operations during this difficult time. Again, I’d say we’re in a different position than some of the other operators here but we’re starting to get into the recovery phase, especially in the markets that have already opened up their dining-rooms.

Jason Brading: I support all the voices here today. It’s obvious we have a lot of intelligent people in our industry speaking today who understand the basic needs of our industry. At the worst, we were down in revenues, we laid off a third of our workforce and had a third of our restaurants completely closed, with the other ones working at a fraction of their capacity. Obviously, if we’re speaking to Ontario, we’re being unfairly punished in Ontario. I’m not sure what the political backdrop is that’s driving that decision. Even Quebec, [which] had some major COVID-19 issues [in May], has managed to re-open sections of the province, including enclosed malls which nobody [else] has mentioned yet. But, in Ontario, enclosed malls are still an issue, along with full-service [dining]. The Ontario government needs to take off its conservative hat and start supporting small business. Canada, everybody knows is, driven by oil and small business — those are the two major economic engines that drive Canada. We know what’s happening to oil; we can’t control that for the most part, but governments can control and help small business and, if they want to protect their economies, they really need to start looking at it. And Ontario is the worst culprit, in my opinion, to date.

Mohamad Fakih: [The Ontario] government needs to put an eviction ban in place. A lot of people are handing in keys [to their landlords] daily — there are 30 to 40 restaurants, good restaurants, handing keys, because the bottom line and the financial statements will never make sense if the governments do nothing and leave it to the landlord, who is not the little guy. We need to really speak loud, all together. I’m not against the Premier, but I am with our industry; I am with our staff, who have a job and the right for us to survive to give people a job. And I find there’s only one way we can do that — we need to get together and become louder. More than 80 per cent of our restaurants are going to be gone — landlords are blackmailing us. Honestly, what’s going on? Where is the leadership in this [Toronto]? Let’s take it into our hands; let’s take back our industry; and let’s tell these leaders that no, we’re not going take the punch and say nothing.

Alex Rechichi: We’ve been fortunate that we’ve been able to stay open. A lot of our brands have been well positioned for off premise and, in some instances, we’re actually seeing sales increase over last year. But, the model itself, when you look at all the different layers that we’re dealing with, the profitability has pretty much been pulled away. We’re working harder and getting nothing out of it. It’s been a challenge, on many fronts, because the government needs to make a decision.

In some instances, they’ve made decisions quickly and haven’t thought about all the ramifications. If you look at the rent program that’s been put in place, even the wage-subsidy program, at one point, our sales were down 20 to 28.6 per cent, so it doesn’t let me qualify for the wage-subsidy program. But there’s no way I’m making money if my sales are down 25 per cent, even 20 per cent. In the restaurant industry, our margins are so thin and, when you look at the rent-support program, for businesses that are down 70 per cent in sales and have to have revenue of less than $20 million, well, that takes a lot of us out of the equation. There needs to be a more scaled approach. We’ve got to get open, get this to some level of normalcy and they have to trust us, because we are a closed supply chain — it’s not like grocery stores where people are touching everything and going through aisles. The reality of it is we have a more controlled environment; we’re under greater scrutiny, we put more measures in place and we adapt faster and quicker than any other industry out there. And we need to start understanding that our voices need to be heard.

Ken Otto: We’ve been very lucky from the get go. We rely on our drive-thrus and our takeout being open, but watching what’s happening in the industry is very concerning because we, as an industry, have done a poor job communicating everything that’s been said [in this call]. We are one of the most controlled, compliant industries in Canada, between alcohol service, health and safety, food safety and supply-chain management. There aren’t many industries that get more inspections than a restaurant, so we know what right looks like — and we have to get that point across. We could provide our guests a safer environment than most retail. Then there’s a fallacy that restaurants can survive off takeout and delivery. There’s so much news on takeout and delivery, which has been great, but there’s a great misconception amongst governments and Canadians that it can last inperpetuity. But that’s not a model to sustain ourselves over summer. And this notion that there is just a moving target — let’s get out there and say, ‘what does government need to see for restaurants to get open again’ — that needs to be part of the dialogue. But the best subsidy in the world is our guest’s money — we don’t need government money, we need our guest’s money coming in.

Domenic Primucci: First and foremost, we’re quite lucky to be deemed essential. We were able to stay open for the most part — we have a few locations that did close because of their location in malls and non-traditional types of locations — but we got hit hard as well and didn’t know where we were going. Our system is franchise based and we have franchisees who are panicking, so the mental state was a challenge with all our people and that played a huge role with us. We even took off the royalties for a month, so we had no revenue [as a company], but we tried to help out as much as possible because, at that time, there was really no program yet from the government. [The government] is great at announcing things, but nothing really gets accomplished with announcing things with a lot of programs. We need, as an industry, some voice with the governments because the industry needs to get going. And that’s going to benefit everybody — not just the takeout and delivery [operators] — because it’s going to get people out. We need to get our voice out to say we’re done [waiting].

Ryan Smolkin: I’ve got 150 locations coast to coast and the majority of those are in sports and entertainment venues, as well as university campuses. Those are all shut down and they’re not coming back in September — I’m going to be lucky if I’m back in January — so I’m focusing on my bricks and mortar, my franchisees, and trying to help them keep their doors open. I’ve had a lot that have closed permanently — I’ve only got one location that’s left open right now in Toronto — and a bunch of them have handed the keys over because of a bully landlord. There has to be some changes made on the rent-subsidy program. It’s a joke, it doesn’t help any of my stores. I’m struggling to have them stay open from noon to eight, solo shifts, per day. So that’s my owner/operators doing that — they’re not getting any help on their rent. I have some good relations with some great landlords who have helped and have stepped up to the plate, so I can’t put them all under one category, but the majority are not helping — they’re doing the threatening. Then there’s the fact [franchisees]can’t get any subsidies on wages because they’re owner/operators. They’re not benefiting from any of that.

Rammy Sallal: We’ve been shut down since March and have cancelled events up until the end of August — and there’s no end in sight. So, we’re burning through money every day, every month, with the opportunity to make zero dollars and the government support they put out completely missed our sector. We can’t even go to our landlords for help because we don’t qualify. Everybody’s rent, in my industry, is way over $50,000 — well over $100,000 — so we can’t even ask for help. We can’t get the simple $40,000 loan because they made the payroll [threshold] $1.5 million and we all supersede that. And the 75-per-cent subsidy would be great if we can hire people to work. So, right now, nothing applies to my [sector] at all — and the biggest problem is the fear. The media needs to change the message, it’s this fear that’s affecting us. Even if the government told us to open today, guests will not come; they won’t show up to a wedding. It’s impossible to do my business with social distancing.

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