Coronavirus nearly shut doors of 6 SLO County restaurants. Here’s how they stayed open
North County restaurant group owner Eric Peterson said he was on the verge of temporarily closing his six restaurants after San Luis Obispo County’s shelter-at-home order shut down dine-in service on March 18.
But federal government loans have kept his businesses afloat for the time being, while they offer food to go and delivery service.
Eric Peterson, owner of Street Side Ale House in Atascadero and five other restaurants in the North County, said that he’s earning about 30% of normal business revenue and hopes to ramp up to at least 70% when dine-in restrictions are lifted.
Meanwhile, he’s hired back more than half of his employees after laying off about 95% of his staff.
In addition to Street Side Ale House, Peterson is the sole or partial owner of Guest House Grill and Country Touch Cafe in Atascadero; Jack’s Bar and Grill in Templeton, and and Comfort American Kitchen and Touch of Paso in Paso Robles.
Peterson collectively employs about 100 people. He had about 180 employees before COVID-19 turned life sideways.
“It was an abrupt halt,” Peterson said. “We were moving at 65 miles per hour and then all in one day everything shut down. It was full speed to 0.”
Peterson said his businesses weren’t originally set up to focus on takeout meals, but they’ve adjusted.
As soon as federal stimulus loans were offered through the Coronavirus Aid, Relief, and Economic Security Act, also known as the C.A.R.E.S. Act, Peterson said that he applied through his bank and had all of his tax information at the ready.
“We were really on the ball because of previous experience getting business loans and everything they ask for during the process,” Peterson said. “Without a (Payment Protection Program) loan, we likely wouldn’t have been able to continue staying open.”
After a slow start, business has steadily begun to get busier, Peterson said.
“We’ve had a steady uptick in our takeout and delivery orders,” Peterson said. “Hopefully, we’ll be able to rehire all of our employees and continue to offer takeout on a high level even after dine-in restrictions are lifted.”
Business loans boost SLO County restaurants
Peterson said the Payment Protection Program loan money his partnership group received will cover employee pay over a two-month period. He and his partners will have to meticulously document how the funds are being spent to get government loan forgiveness, or pay back the funding at 1% interest.
The PPP loan is designated to help keep workers employed and offers up to $10 million at a 1% annual percentage rate. Borrowers must spend at least 75% of their loan on payroll costs, while the rest can be spent on other expenses such as rent and utilities.
The loans can be up to two and a half times the borrowers’ average monthly payroll costs in January and February 2020.
In a recent poll conducted by the San Luis Obispo Chamber of Commerce, only 14% of businesses that responded had received either partial or full payment of their loan requests due to a backlog of requests and banks prioritizing existing clients in certain cases.
“It breaks my heart that so many local businesses didn’t get a loan, and have had to temporarily close,” Peterson said.
Peterson said he received four different PPP loans because he’s part of four different limited liability companies, and the money was based on the numbers of employees with each entity.
Peterson said the businesses called their workers to offer them their jobs back. But some have chosen to stay on unemployment for the time being, he said, partly because it pays better than restaurant work and also because of coronavirus-related health and safety concerns.
With extra unemployment pay during the pandemic, some out-of-work Californians are earning up to $1,050 per week.
“With tips in a restaurant, you can make around $200 per night,” Peterson said. “But without as much tip money coming in right now, they can’t earn that much. If I hire them back at $13 an hour plus 10% on tips of what we’re used to making, they can earn a lot more on unemployment.”
But Peterson said some employees want to get back to work.
“Unemployment will expire, and some people now want to get back to work,” Peterson said.
The restaurant owner said he’s learned not to plan for a dine-in reopening date.
“We have heard so many rumors and things have changed so much. We’re secretly hoping for June 1,” Peterson said. “But it’s really hard to say what will happen.”
Food for delivery, craft cocktails to go
Meanwhile, Peterson said the restaurants have had to change the way they do business drastically. They’ve started a new delivery service and packed away all their plates in favor of to-go boxes.
The restaurants now sell more craft cocktails to go than any other type of alcohol.
In addition, they sanitize extensively and workers wear protective gear to stay safe.
“We scrub up, sterilize, re-scrub, sterilize,” Peterson said. “We have spray bottles all around and bleach and Clorox.”
He said the businesses get alcohol-based hand sanitizers from two local distilleries, Krobar Craft Distillery in Paso Robles and Central Coast Distillery in Atascadero.
Peterson said that most restaurants operate with thin profit margins — about 5% to 7% — and his operate roughly in the 5% to 10% margin range.
He hasn’t personally collected a paycheck since the coronavirus pandemic upended his businesses.
When shelter-at-home restrictions are lifted, Peterson expects to have to space tables at his restaurants at least six feet apart and operate at about 50% capacity — though he may be able to seat some dinners on city street spaces outside his businesses if jurisdictions allow for it.
“Even if we operate at 75% (when restrictions are lifted), we’d still be profitable,” Peterson said. “I’m hoping to get 50% of seats and another 20% or so on takeout, that could help get us somewhat back to normal.”
This story was originally published May 11, 2020 at 9:41 AM.
%20Cropped.jpg)