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Yahoo Finance’s Alexis Christoforous and Chef Andrew Gruel, Slapfish Restaurant Founder, discuss the latest impact of COVID-19 on the restaurant industry.
ALEXIS CHRISTOFOROUS: 30 million residents in California are under strict new stay-at-home orders today, as the state struggles with a record level of COVID-19 infections and hospitalizations. Among those new restrictions, a ban on outdoor dining in several counties.
Chef Andrew Gruel says he will keep his LA eateries, Slapfish Big Parm, open despite that ban. And chef Gruel joins us now. Chef, thanks so much for being with us. Explain to the people why you are defying Governor Newsom's orders and keeping your restaurants open for outdoor dining.
ANDREW GRUEL: Well, thank you so much for having me. First, let me state that our actual, you know, the parameters of our restaurants. We eat have banned indoor dining, obviously. We have mask mandates, Plexiglas everywhere, order at the counter. We have a wide open outdoor patio, all of our restaurants, not those kind of three walled enclosed patios.
And I feel as if given the fact that the data does not prove outdoor dining is dangerous in any way, that our customers eating outside, in the open air, socially distanced, spaced tables, and in groups of less than four is a safer option than jamming back into an office, their house, a car, because at the end of the day, we know people aren't just going home and staying within their family circle.
People are going out. They're still co-mingling. They're intermingling. So for us to ban people from eating outdoors in a safe environment, I actually feel will exacerbate the problem and not help anyone.
ALEXIS CHRISTOFOROUS: Do you feel that restaurants and small business owners in California are being unfairly targeted by these new strict stay-at-home orders?
ANDREW GRUEL: Of course, because small businesses, they're not going to fight back, because we're all really, really tight on our margins. Most of us don't have any cash flow. We don't have a huge legal team. We don't have lobbyists. And when you look at the regulations, for example, I can't have anybody eat outside. But I can go to Walmart. I can go to Target. I can go to any one of these big box retailers and stand in a line of 100 people.
And most of these people aren't wearing masks. We've all been to a Walmart. If anything, their nose is hanging right out there. And there's no problem to go shop there, although I can't be able to serve people good scratch made food that's healthy and good for people.
ALEXIS CHRISTOFOROUS: What has demand been like at your restaurants in terms of outdoor dining? Because I know indoor dining has been closed now. But are you actually seeing people wanting to come to the restaurant and want to eat outside?
ANDREW GRUEL: We do, because people understand that being outdoors is very good. We're in California, I mean, vitamin D. The weather is 70, 75 degrees and sunny. People are trying to get out of their houses and out of these enclosed environments and to get some fresh air.
And so they're coming to the restaurants because we have the patios, because we have access to outdoor dining. So they really want to take advantage of this, because they understand that it's healthy for them.
ALEXIS CHRISTOFOROUS: Did you get any PPP loan money or any sort of assistance from the federal or local government throughout this pandemic for you and your restaurants?
ANDREW GRUEL: No. So our story is that we applied for the PPP loans originally, and we were rejected. And then there was obviously a lot of kind of public backlash, as we started to see some of these large corporations get in the $10 to $15 million range. And then our bank actually contacted us back and said, OK, we are approved.
At that point, we had already started to research the program that they put forth with the employee retention credits. So we rejected any of the PPP loans in order to follow through with employee retention credit program and file our form 7200 to get some backdated relief. It is now-- let's see, we did that in April, May, and we still have not gotten any of the money from the employee retention credit program.
ALEXIS CHRISTOFOROUS: How much money are you expected to get or do you think you're going to be getting?
ANDREW GRUEL: Over $150,000 due.
ALEXIS CHRISTOFOROUS: And you're still waiting on that. So look, I mean, I don't have to tell you, lawmakers are still trying to hammer this thing out and get a stimulus passed. What would your message be to those lawmakers right now? And what do you want to see in that stimulus package?
ANDREW GRUEL: I want to see the target go towards small business owners and individuals, right? I mean, it's our team members, our employees right now, who are getting cut off before the holidays, tight on cash flow. $1,200 over an eight month period is not enough to stimulate. And it's not enough for our team members to be able to survive.
Those that have either been laid off, most of the people in California that I know, still haven't even gotten unemployment benefits. So there's obviously an issue with that program. So if these lawmakers can stop thinking about the lobbyists, stop thinking about the big corporations that might be funding their campaigns, and instead can start thinking about the small business owners in every single community, that's the engine of our economy.
I mean, look, I know that it's important that the people that are donating to their campaign get taken care of first, but really, you know, those of us out here on Main Street are having trouble.
ALEXIS CHRISTOFOROUS: I know you've been pretty critical on social media of some local politicians, including Governor Newsom there in California. Is the problem that you feel they're saying, you know, look, I want you to do as I say, not as I do, that there is some hypocrisy going on there?
ANDREW GRUEL: Yeah, I mean, obviously there's hypocrisy. And we could go on about that for 20 minutes. There's so many politicians that have obviously been hit with the hypocrisy hammer. But more importantly, it's also the messaging not necessarily reflecting the way in which they're leading.
So the problem I have with Newsom is that the day that he banned indoor dining, he went out and dined with 22 of his closest friends indoors at the French Laundry, spending an exuberant amount of money, which on the optics alone obviously doesn't look good. Then when he made his public apology, he lied again. He said no, no, we were outdoors, et cetera. Then the pictures were revealed. And it was like, OK, well, you know what? I lied. What are you going to do about it?
You know, there's just this disconnect between all of us that are out there, trying to make every single dollar important, giving people jobs, and what's happening in this kind of elite class of rulers, if you will, specifically in California, telling us what we can and can't do, especially when the regulations don't even seem to make much sense.
ALEXIS CHRISTOFOROUS: So I know that you're open for business. Now real quick, before we let you go, have local authorities gotten in touch and told you, hey, look, you got to shut down?
ANDREW GRUEL: Well, today's the day. I'm looking up here at the cameras. We're open. And we'll see how this all kind of flows through the legal system and what the regulations and fines, if you will, end up being, so we can kind of way our own cost benefit analysis.
ALEXIS CHRISTOFOROUS: All right, Chef Andrew Gruel, we wish you the best of luck. And we want to follow your story. Come back and share with us what happens, OK?
ANDREW GRUEL: Thank you so much for having me. I appreciate it.