So Many Restaurants Declaring Bankruptcy

The coronavirus shutdowns began in mid-March and restaurants dutifully closed up to protect staff and guests. Some were able to get by with curbside or delivery service until the weeks became months and spring became summer and autumn’s approach began signaling that many will be gone for good as capacity remains capped at 75% and bars are still shuttered.

It’s the tight margins of the restaurant business, says financial planner, CPA and attorney Bill Dendy, who was in the restaurant business. It has always been a tough road to hoe in the best of times, he says, but these are the worst of times and the margins are too narrow for many to endure. “The challenges for restaurants are numerous under normal conditions. When you add on some additional restrictions many restaurants are not going to be able to cope,” he says.

In Houston, Bernie’s Burger Bus is no more. Dolce Vita is gone. Five locations of Pappas Restaurants won’t come back. Dak and Bop, a favorite Korean fried chicken Museum District favorite, won’t be back. Many national chains including Sweet Tomatoes, Sizzler USA, and California Pizza have filed for bankruptcy.

Dendy says some have shifted and adjusted to more concentration on to-go orders and curbside pickup, and that model may survive the pandemic. “Without having to replace a tablecloth, have a waiter available, have the overhead and additional staff to keep the overhead up…that can actually be a higher profit margin area.”

Houston Underbelly owner Chris Shepherd’s “Southern Smoke Foundation Emergency Relief Fund” has distributed almost $3.4 million to more than 1,800 restaurant workers nationwide.

photo: Getty Images

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