In the absence of RRF, restaurants can use technology to boost recovery


The following is a guest post from Ben Pryor, head of innovation at point-of-sale company SpotOn.

It looks like Washington is abandoning the restaurant industry. This week, Congress indicated that it would not replenish the Restaurant Revitalization Fund as part of the omnibus spending bill that would have acted as a lifeline for nearly 200,000 neighborhood restaurants and bars in the United States. The package will fund the federal government after Friday. Over the past two years, independent restaurant owners have faced every challenge imaginable and inconceivable – from masking, capacity limits and closures to labor shortages and the incredibly high food costs associated with incredibly slow supply chains. And now this.

For thousands of restaurants, the RRF was the only thing stopping them from returning their signs to permanent closure. According to the Independent Restaurant Coalition, 42% of businesses that did not receive RRF grants say they were at risk of filing or have filed for bankruptcy. Even among those who have received FRR grants, 20% still say they are at risk. In thirty years in the restaurant business, I have never seen the industry so close to the abyss.

But here’s the thing with restaurant entrepreneurs: you give them a hard time, they work harder than ever. Through courage, heart and restlessness, independent restaurateurs have managed to survive and stay in the fight alongside well-capitalized corporate chains. Independent restaurateurs are the ultimate underdogs, and this pandemic has proven that more than ever.

Do we need government intervention? Absolutely, unequivocally yes. But guess what? Restaurant owners can’t wait. And those of us in the industry need to do more than ask the government to act. We need to find ways to improve the basic economics of the hospitality industry and help show owners and operators how to maximize what they have in their control.

Prior to the arrival of COVID-19, profit margins for full-service restaurants with a single location averaged 6.2%, according to a report by IBISWorld. This figure is representative of the long-held perception that single-digit profit margins are the norm. Unsurprisingly, the pandemic has made those thin profit margins even worse.

Restaurant owners work hard, really hard, but the sad truth is that hard work alone isn’t enough to improve their bottom line. Hard work can’t reduce commissions from third-party apps. Hard work can’t get staff out of the clock earlier by settling tips faster. Hard work will not more efficiently get tickets for the kitchen and food for guests. But, when hard work and hard work technology come together, restaurant profit margins can grow from the 5-7% profit margins this industry expects to the double-digit margins this industry deserves.

To be clear, tech for the sake of tech isn’t going to move the needle here. There have to be three things to actually set restaurants up for long-term success:

  1. Respectful of people. We’re in the hospitality business and technology needs to improve the guest experience. We’re also facing one of the industry’s worst labor shortages in decades, so technology must also make life easier – and more profitable – for staff.

  2. Soft. It should allow owners and operators to work incrementally, implementing what they need when they need it. Add a tool, add to the bottom line – half a dot here, two dots there. Use report information to inform planning and menu planning, and save on labor and food costs.

  3. Cloud-based. Implementing new technology in a restaurant is no small feat, so it needs to be designed for whatever the future holds. This means an open system that can easily adapt and integrate with other technologies.

Restaurants are constantly growing and evolving. Having access to tools that transcend rigid, one-size-fits-all solutions is key to enhancing a restaurant’s unique growth and evolution. And all of this has an impact on more than the bottom line. Increasing profitability increases opportunities – for the restaurant owner and the community.

Underdogs aren’t used to sitting around waiting for someone to come along and save them. And restaurateurs are getting messy, getting savvy, and doing whatever they need to do to save their business. Is additional financing from the FRR or another government necessary? Absolutely. But in the meantime, those of us who love and rely on this industry need to step up and provide solutions that actually make running a restaurant profitable these days. This industry has been my home for three decades – it has given me a family, a purpose and a livelihood – and I’m not just going to root for the underdog on the fringes. I will fight with them.


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