Important Considerations During Election Season
Ask the restaurant legal professionals. The political climate in our country has reached a boiling point, and your establishment is not immune from the election-related turbulence that is facing us as a Nation. So, here are some frequently asked questions—along with some answers—to help guide you through this election season. Employees Expressing Political Opinions at Work: An employee is claiming they have the right to say whatever they want at work about the upcoming election, saying they have a First Amendment right to free speech. Are they correct? The employee’s right to free speech is protected from intrusion by the federal government; But is not generally protected from restriction by a private employer. Thus, private employers can decide how to manage their workforces by placing limits on employees’ political expression in the workplace. So that means we have an unrestricted right to prohibit whatever election-season speech in the workplace we want? And we can discipline or even fire any employee that violates our rules? Not so fast. Private sector employees have the right to engage in concerted activity under the National Labor Relations Act (NLRA) for purposes of collective bargaining or other mutual aid or protection. This is true in both union and nonunion work groups. Under Section 7 of the NLRA, concerted activity includes statements made for the purpose of initiating, inducing, or preparing employees for group action, such as discussions about higher wages, changes to work schedules, and job security. Therefore, certain political discussions impacting terms and conditions of employment would fall under the NLRA’s purview, while political activity that is unrelated to employment concerns would not be protected. Do we have any other concerns besides protected concerted activity claims if we discipline or terminate an employee for expressing a political opinion at work? Federal antidiscrimination laws don’t directly protect political activity or speech, but your workers’ activity or speech could trigger these laws. If the discussion directly (or perhaps even indirectly) involves race, color, sex, sexual orientation, gender identity, national origin, religion, age, or disability, you need to be careful. After all, an employee could claim that your action responding to their political discussion on such subjects is actually a proxy for illegal discrimination. Think twice and check with counsel before disciplining any employee for engaging in such a discussion. You’ll also want to be consistent in how you address political discussion across all employees so as not to create any appearance of preferential treatment based on a protected characteristic…
Empty Tables and Rising Costs Push More Restaurants Into Bankruptcy
There’s going to be pain for a while. Americans love fish tacos, but not enough to keep Rubio’s Coastal Grill from joining one of 2024’s biggest food trends: the bankrupt restaurant chain. The California chain founded around 41 years ago by a surfer hung on through the Covid-19 pandemic, and sales had been improving. But business never came all the way back, and as expenses climbed and customers grew fed up with the rising cost of eating out, Rubio’s filed for bankruptcy protection in June. “You have locations that just aren’t viable. You have the Covid hangover, labor costs. There’s multiple problems,” said Jeff Crivello, president of Trew Capital Management, an investment firm that bought Rubio’s out of bankruptcy in August. Restaurant chains and operators this year are on track to declare the most bankruptcies in decades outside of 2020, when the global pandemic upended the industry’s operations, according to an analysis of BankruptcyData.com records. The firm tracked chapter 11 filings of restaurants that are publicly traded, along with companies holding more than $10 million in liabilities. Restaurants declaring bankruptcy this year include sit-down chains Red Lobster and Hawkers Asian Street Food, along with a string of fast-casual operations such as Tijuana Flats and Roti. More eateries on the edge are likely to file for bankruptcy in the coming year, according to restaurant executives, attorneys, and lenders. Nearly five years since the pandemic hit the more than $1 trillion U.S. restaurant industry, the sector’s health has improved on many fronts. Hiring is robust and an average of 3,700 new restaurants are opening monthly this year, according to market-research firm Datassential. But some chains are still struggling because customers have pulled back on dining out, and high interest rates have hurt companies that gave priority to growth over profit…
Bielat Santore & Company – Restaurant Industry Alert
BACK ON THE MARKET
MONMOUTH COUNTY, NJ PRIME TIME PUB FOR SALE
Photo used to illustrate “Shore Pub” only and not actual representation.
Savor the Success of a Prime-Time Pub! This Monmouth County, NJ gem boasts a free-standing restaurant and bar exuding pub charm, serving up delectable dishes and top-notch drinks, with a proven track record; grossing $1.6M. In addition, seize the opportunity to own the adjacent residential property for added real estate value and rental potential. Nestled along bustling New Jersey State Highway 35 corridor, this property offers a prime location with gateway to the NJ shore.
Contact Richard Santore 732.531.4200 for additional information.
We invite you to visit our website, where you will find all our current listing inventory, a library of helpful industry resources and a collection of client testimonials expressing their assessments of our work and our service within the restaurant industry.
A voice for our industry. If you find these weekly bulletins informative and beneficial, we kindly ask that you write a brief Google review providing a vote of your appreciation. Simply click this link and leave a review. Thank you.
Why Bars and Restaurants are Shedding ‘Sunday Ticket’ Subscriptions
Google’s YouTube replaced DirecTV last year as the exclusive provider of “Sunday Ticket.” YouTube ended DirecTV’s nearly 30-year exclusive ownership of the out-of-market games package by paying the NFL $2 billion per year. What’s less known is the YouTube deal only applies to residential customers. DirecTV still provides bars, restaurants, small businesses, and hotels with game access — but it no longer has the exclusive rights. That changed last year, too. Those additional rights are owned by EverPass Media, a new joint venture co-owned by the NFL and private equity firm RedBird Capital Partners. EverPass struck a deal with DirecTV last year, allowing the satellite TV provider to maintain its commercial relationships. As a condition of that deal, EverPass included the right to build its own commercial streaming connection for “Sunday Ticket,” bypassing third-party licensing. That has now happened, as my colleague Lillian Rizzo reported in July. EverPass acquired UPshow, a platform with the tech capabilities to allow commercial establishments to stream live sports. EverPass sets all the pricing for “Sunday Ticket,” both for its new streaming product and DirecTV’s satellite offering. Both cost the same amount. If a small sports bar — fire code occupancy of less than 100 — received “Sunday Ticket” last year, it will pay $1,100 for the product this year, a $100 increase, according to a pricing document obtained by CNBC. The larger the establishment, the higher the price. A bar/restaurant that can fit more than 10,001 people has to pay $306,200 for the season. Just six weeks into this NFL season, DirecTV has lost more than 10% of its commercial customers, according to people familiar with the matter. Previously, DirecTV has said it serves about 300,000 commercial establishments. So while EverPass sets identical pricing for satellite and streaming, there are certain reasons why a commercial establishment may want the internet version over DirecTV, or vice versa. The streaming version of “Sunday Ticket” can be bundled in with other services EverPass provides, such as Peacock Sports Pass, the NBCUniversal streaming service’s commercial product, and Amazon Prime Video. So, if you also want to make sure your bar or restaurant has exclusive Peacock sports content and Prime Video’s exclusive “Thursday Night Football,” this may be appealing. Everpass also offers short-form channels to businesses, such as sports trivia, betting odds and viral videos, which may be appealing to certain establishments…
Jersey Mike’s Focus on Brand and Culture Drives its Consistent Growth
Company’s priorities haven’t changed. Mike Manzo’s career with Jersey Mike’s has lasted longer than many marriages. He got involved with the brand in the late 1970s, following in the footsteps of his two older brothers who worked for founder/chief executive officer Peter Cancro when he purchased the precursor, Mike’s Subs, in Point Pleasant, N.J. It wasn’t his intended plan. Manzo enlisted in the United States Marine Corps in the early 1980s and wanted to become a New Jersey state trooper when his service ended. “That was in the works until Peter had a thought about mid-1986 to start franchising. That’s when he put the name ‘Jersey’ in front of ‘Mike’s’ and we became Jersey Mike’s. Same concept, same processes,” Manzo said during a recent interview. By then, however, the team had some experience under its belt. Jersey Mike’s expanded to about 35 stores but hit a major bump in the early 1990s when the country dipped into a recession. The entire staff, including Manzo and his older brother, was laid off. “But we all came back and in ’96 we started refranchising. Through those times we learned a couple of valuable lessons and one was to be true to yourself and true to the brand and culture. Understand what got you here. Don’t change it,” Manzo said. Nearly 30 years later, the company remains committed to those lessons. As such, Jersey Mike’s has been one of the fastest growing chains in the industry, both by sales and unit count. According to Technomic, the chain ended 2023 with about $3.34 billion in sales – a 24.8% year-over-year increase – and 2,684 locations – a 12% year-over-year increase. Manzo has served as chief operations officer since 2006, before the chain endured yet another recession. Shortly after that downturn, however, the chain turbocharged its growth, and has added more than 1,000 new restaurants in the past nine years. Jersey Mike’s still hasn’t budged from its foundation. “We have to go back to the basics – believing in each other and pulling people with us. And when they say ‘it’s tough to find employees these days,’ well, they said that in the ‘70s, ‘80s, and ‘90s. It’s always tough, but if you want to recruit … trust each other, believe in each other. Show empathy and support. You will have hard days, but when you put all those factors together, you get through those hard days,” he said…
Some Restaurant Executives Believe Traffic Will Pick Up After the Election
Uncertainties will ease a bit once we return to a ‘more normal environment.’ How are restaurant leaders feeling about the election? Politics aside, many of them are simply eager to get through it. A new CEO survey from Marcum and Hofstra University shows there are a plethora of concerns about the current unknown as it pertains to policy proposals from leading candidates Kamala Harris and Donald Trump, with over 90% indicating they are either “very” or “somewhat” concerned about the current state of the economy. Also weighing heavily on business leaders’ minds are regulatory positions, corporate tax rates, trade policies and tariffs, and immigration and labor markets. A majority of CEOs believe political uncertainty is what is impacting their business the most right now, and that concern could likely fade a bit once a candidate is sworn in in January. Indeed, it wouldn’t feel like an election year without a significant level of unpredictability. Restaurant executives have been navigating this uncertain environment for much of this year. In the second quarter, for instance, CAVA chief executive officer Brett Schulman noted that an adjusted low double-digit same-store sales guidance for the rest of the year reflects the current strength of the business while also “contemplating the macroeconomic and election uncertainty in the remainder of the year.” Red Robin chief executive officer G.J. Hart believes restaurant consumer traffic will likely pick up after the election in November following a year-plus of industry-wide traffic declines. “I think the consumer is scared. They’re worried about economic conditions,” he said during an interview in September. “The election is creating a bit of angst. I am optimistic once we get that behind us, it will create some stability and people can take a deep breath and settle back into a somewhat more normal environment, and that consumer sentiment should get better…”
Avoiding the Four Biggest Traps of Restaurant Payroll
There are many cases of restaurateurs being charged with violations of labor laws. Such as the owner of a DC fine-dining restaurant having to pay more than $500,000 following allegations of wage theft, or two Massachusetts eatery owners having to pay around $475,00 in restitution and civil penalties for violations including failing to pay minimum wage, failure to make timely payments to employees, violations of the state’s tips laws, and failure to keep accurate payroll records. While these cases may be on the more extreme side, restaurant owners have to be careful not to fall into any traps when it comes to payroll, as even accidental violations could still yield big penalties. As an example, a restaurant owner doing payroll by hand may incorrectly record overtime pay and tip records, which subsequently leads to tax errors. Even if these were unintentional, this individual would still be subject to fines and a loss of trust with staff. This goes to show that restaurant staff pay, which makes up about a third of restaurant operating costs, is one of the most important facets of running a restaurant. When restaurant owners get it wrong, it could lead to fines, broken trust among employees—as with the examples above—and even jail time for more egregious violations. Get it right, and restaurant owners will have happier and more loyal staff, leading to increased retention, an ongoing problem in the industry. Staffing levels have been on the upswing since the dark days of the pandemic, with the number of jobs at bars and restaurants up nearly 0.7 percent, about 87,000 positions, above their February 2020 employment peak, according to the National Restaurant Association. Quit rates have also fallen since then. It’s great news that so many people are either returning to or entering the restaurant industry workforce, and at higher salaries than in the past. But this development also raises the pressure on each restaurant owner to not mess up payroll, and see their best employees running for the exits and straight for their competitors. Here are four of the most common traps for restaurant owners to avoid when it comes to payroll…
Hate Noisy Restaurants?
Stick this in your ear. Booking a table for two at Tao Downtown, I hesitated when I got to the box asking whether I had a special request. I did, but I wasn’t sure how it would go down. Would I be the first customer in history to ask for a noisy table? This is not a normal ask, but I had my reasons. Recently I’d been trying to find out whether the way to hear and be heard in a dining room filled with booming speakers and screaming diners might be as simple as wearing a pair of earbuds. To put it to the test, I needed something I usually try to avoid: a hellishly loud restaurant. As you may have heard, Apple announced last month that it would soon introduce new software enabling its AirPods Pro 2 earbuds to act as over-the-counter hearing aids for mild to moderate hearing loss, adjustable to your own ears. (You will be able to take a simple exam from Apple on your device, or upload the findings of one given by an audiologist.) What you may not know is that the AirPods Pro 2 already come with a setting that can turn up the volume on the voices of people you’re talking to and another one that tamps down background noise. Other earbud makers, including Sony, Samsung, Beyerdynamic and Soundcore, also offer functions meant to make conversation easier in noisy places. AirPods outsell them all, though, which is why I wore a pair to Tao and several other Manhattan restaurants known to wreak mayhem on the eardrums. Over my 12 years as a restaurant critic, few problems I wrote about drew as many emails and comments as noise, and no issue came anywhere close to sparking as much white-hot rage. When I admitted that I like loud restaurants, up to a point, many readers were angry with me. They were even angrier with restaurants. I get it. Long exposures to loud noise can cause hearing damage. Even at less brutal volumes, not being able to hear the other people at the table is maddening. Not being heard — having to repeat yourself and raise your voice until you sound as if you’re in a screaming match — is worse. All this is more punishing for people with any amount of hearing loss. Drowning in an angry sea of background noise, most of us finally give in to helplessness. We seethe, silently…
Did You Know?
USDA expands a massive meat recall to include products shipped to restaurants. Nearly 12 million pounds of poultry and other proteins from BrucePac are suspected of being contaminated with listeria. A massive recall of ready-to-eat meats from Oklahoma-based processor BrucePac has been expanded to include products that were shipped via distributor to restaurants, school cafeterias and other on-site feeding operations. The meat may have been contaminated with listeria, according to the U.S. Department of Agriculture (USDA)…
Employee Tip
Overlooked traits when hiring restaurant managers. When hiring restaurant managers, qualities like organization skills, experience and leadership are always at top of mind. However, many traits exist that often go overlooked in the hiring process impacting the success of a restaurant. Here are three traits that often go overlooked when hiring management positions within restaurants…
