Jarrett Walsh bought The Tasting Room just weeks before Gov. Larry Hogan ordered restaurants to switch to take-out and delivery only due to the COVID-19 pandemic. So he did.
Then in April, he closed. The takeout model didn’t generate enough income at the time to keep his restaurant sustainable.
But now, as the state nears its first stages of reopening, Walsh opened his doors again, despite still having confusion with some of the state’s relief programs.
“I’m in a special situation, which is I just bought a restaurant on March 2, so I have pretty extreme amounts of loans to repay,” Walsh said. “… That was the main thing, we have to figure out a way to make a little bit of money to be perfectly honest.”
Many Frederick restaurants have see-sawed between being open for carryout and being closed altogether since the state of emergency began on March 15. Between an uncertain timeline for reopening the state, confusing grant guidelines and reductions in staff, restaurants across the county have been unsure about whether or not to continue their carryout and delivery services.
Hootch & Banter on Market Street closed when restaurants were ordered to close on March 16. But last Thursday they opened back up for carryout for the first time.
Cherie Salem, co-owner of the restaurant, said she and her husband made the decision to close to keep their staff safe. Now, with most of them on unemployment, they decided to reopen Thursday through Sunday each week with a limited amount of staff.
“We can’t stay closed for an extended period of time,” Salem said. “We had to do something.”
Similarly, Shuckin’ Shack on Market Street closed for the first two weeks after the governor’s order. Wade Newman, co-owner, said at the time he didn’t know how long the order would last, and wanted to make sure his employees were all safe.
“Nobody knew what to expect and obviously you worry about your employees, is probably the most important thing with what’s going to happen there,” Newman said. “So, just wanted to figure out what was going to happen and then go from there.”
By April, Shuckin’ Shack opened back up on the weekends. That also made it easier to order inventory, Newman said. Since Shuckin’ Shack primarily serves fresh seafood, they didn’t want to risk getting deliveries every day that could go to waste.
However, he hasn’t had much trouble getting inventory in, which other restaurants said has been strenuous, as food supply chains struggle.
All his employees have gone on unemployment, and Newman is primarily working with just his business partner to run the restaurant. He applied for the Paycheck Protection Program but hasn’t heard back.
Walsh, on the other hand, received his Paycheck Protection Program assistance on May 1. But with most of his employees already on unemployment, he’s not sure how to use it.
“That was great,” he said. “But the incredibly murky rules and guidelines on how you’re supposed to use that money has created an enormous problem.”
The PPP, offered by the Small Business Administration, allows businesses to take the assistance as a grant if they spend 75 percent of it on payroll and 25 percent of it on rent and utilities within an eight-week span.
But Walsh only has 10 employees working right now — the maximum he can have in the restaurant with social distancing guidelines in place.
While he can extend re-employment offers to his employees, if they choose to turn them down, he has to document their refusal to return back to work and send it to the Department of Labor, Licensing and Regulation, which could lead to them losing their unemployment benefits.
“I have to maintain the same number of employees as before, which is basically impossible, because I can’t have as many people in the restaurant,” Walsh said. “So I have to basically invite them to be rehired, and if they decline, then I need that in writing, and that then counts toward the number, but then they get kicked off unemployment, so that’s not so nice.”
The SBA stated in an FAQ on its website that employees who are offered to be rehired but dismiss the offer will count toward the company’s total number of employees, but they must get it in writing.
So Walsh is in a difficult spot.
“So either I take it as a loan and use that loan to repay other loans and do that whole mess of a thing, or I try to get it as a grant, and take people off unemployment to potentially have them be put back on unemployment after eight weeks because I don’t know if we’re going to be open to full capacity,” he said.
Business, he said, hasn’t been as great as it was when the restaurant originally did takeout in the last couple of weeks of March.
Newman said Shuckin’ Shack’s business is OK on the weekends. He’s unsure what the next month or two could look like for the restaurant as the state begins to reopen. Restaurants are encouraged to limit their seating, but that’s difficult to maintain with a restaurant like Shuckin Shack that is already small and has a long and narrow corridor of seating throughout most of its restaurant.
“So at that point, then you have to think about your staff and you kind of got to weigh the numbers there,” Newman said. “So for us, we’re just going to wait and see what they do come out with.”
Walsh, too, is nervous about half-opening, which could lead to him not needing as much staff. He doesn’t want to rehire his staff just to have to lay them off again a few weeks later.
“I’m just hoping for some clarity and some guidance on this PPP money and hoping to get some clarity on when we can open back up, but I understand that’s very hard to do,” Walsh said. “I hope nobody gets sick.”