U.S. markets open in 9 hours 7 minutes
  • S&P Futures

    -24.25 (-0.71%)
  • Dow Futures

    -188.00 (-0.67%)
  • Nasdaq Futures

    -73.25 (-0.63%)
  • Russell 2000 Futures

    -11.50 (-0.72%)
  • Crude Oil

    -0.24 (-0.60%)
  • Gold

    -12.80 (-0.66%)
  • Silver

    -0.34 (-1.35%)

    -0.0021 (-0.18%)
  • 10-Yr Bond

    +0.0190 (+2.38%)
  • Vix

    -0.70 (-2.39%)

    -0.0014 (-0.11%)

    +0.1490 (+0.14%)

    +1,718.50 (+15.54%)
  • CMC Crypto 200

    +11.22 (+4.58%)
  • FTSE 100

    -112.72 (-1.91%)
  • Nikkei 225

    -197.67 (-0.84%)

Restaurants face ‘grim’ future: NYC Restaurateur

Sanjay Laforest - Privé Group Founder & Owner joins Yahoo Finance's On The Move to discuss the first day of NYC restaurants opening for indoor dining and what that means for the future of the industry.

Video Transcript

JULIE HYMAN: In the meantime, we are monitoring the situation in New York City. We have seen a dire situation for many restaurants across the region, with many of them closing. Small businesses in general have been hit hard. But today marks the beginning of indoor dining in the city. Sanjay Laforest is joining us now. He is Privei Group founder and owner. That operates the restaurants of La Privie and Casa Del Toro. Sanjay, thank you for joining us.

And I know it has been a very tough time. Indoor dining the capacity is restricted to only 25%. What does the financial picture then look like for your restaurants, given that?

SANJAY LAFOREST: Well, it looks it looks extremely grim, to be quite honest with you. 25%, we won't be able to suffice with 25% for very much longer. And, I mean, we're lucky enough to have outdoor dining. And just the cost of the heaters, just the cost of building something nice in the front of the restaurant-- I also do have a backyard garden as well-- that helps a little bit. But at 25%, many restaurants won't be able to sustain. Because they don't have the luxury of at least having that, which is the outdoor space that I do have.

ADAM SHAPIRO: So I'm curious what some kind of assistance package, whether it comes from the federal government or from the state, would look like. And it could be a model, not only in New York, but across the country. Because restaurateurs nationwide are facing the same difficulties.

SANJAY LAFOREST: Correct. Well, we would love to have an assistance package. You know, the PPP was a loan. It's not government aid until it's forgiven. You know, and all the stipulations that they currently have, one of the stipulations is that 65% needs to be used towards payroll. How can we use 65% towards payroll when I'm only allowed to have 25% capacity so only 25% of my employees can work, you know?

And then there are so many other stipulations, I could go down the list. So we would love to have some sort of assistance package that doesn't have as many stipulations. We still have rent to pay. We still have real estate taxes. We still have utilities bills and all of these things to pay. So just without the stipulations, it would help a lot more.

JULIE HYMAN: And Sanjay, you know, confidence is a huge part of this, right? Even if the city said you can go full capacity tomorrow, how many people would come out? I mean, certainly the outdoor dining has been very busy. But as we get cold, we don't know what effect that will have. So I guess the question I'm asking is, if it's 25%, even if you've got some sort of assistance, I mean you've got to make that last quite a long time until we get to a return to normalcy, right?

SANJAY LAFOREST: Absolutely. Consumer confidence is low right now. But I was walking through Central Park the other day. And people were not socially distancing. People were not wearing masks. I think that New York's ready to open, just a little bit more, obviously, open safely. Because this virus is very real and dangerous. And we don't want to jeopardize our city or people's lives just to open the city as to what it used to be.

I would hope that we could open at 50% within two weeks. I could hope that we could open at 100% by the end of the year. But you never know. But I was reading something earlier today that said that the amount of COVID cases are approximately what it was in June. And they're giving us the allowance to open at 25% now. So it's very difficult to understand, and to gauge, and to plan what we should do to move forward.

RICK NEWMAN: Hey, Sanjay, Rick Newman here. What is the situation between restaurateurs and their landlords? I would imagine rent is one of your largest fixed costs. Forbearance, obviously, would help. But then the landlords have to pay bills. And they have to be thinking to themselves, well, if I lose this restaurant as a tenant, how easy is it going to be to get some other tenant in here? So a lot going on there. What is the situation on the ground?

SANJAY LAFOREST: Well, currently, our landlord is currently working with us. He has no concessions himself. He is not receiving any forbearance. He starts to pay his real estate taxes. He still has bills to pay. And he still has to maintain the buildings. And he's a large mongrel New York City. But still, he still has all these bills to pay. So they can't give us any concessions, or forbearance, or forgive our rent, or even lower our rent. Although we would love them to.

So that's currently what's going on, unfortunately.

- And Sanjay, looking at your counterparts across the country, the restaurant at Meadow Wood, a three Michelin star restaurant, was burned to rubble in the Napa fires that happened on Monday of this week. When you think about a pipeline for future restaurateurs, which is a very passion-driven, heavy-investment-driven, sort of pursuit, how do you anticipate that this virus will perhaps dissuade chefs in trying to create a new business? Do you imagine that the industry will be changed sort of permanently as we look to the decades ahead?

SANJAY LAFOREST: Well, I would think so. The restaurant industry was a difficult industry to get into five years ago, or six months ago, or a year ago. At this juncture, I don't see a lot of people are going to go to school in the hospitality business and then want to open restaurants. And there are so many things and so many obstacles to overcome in terms of people being afraid, people not wanting to go out, and all the rules and regulations that are being mandated upon us and not being policed within-- I could give you examples within New York City.

Finally, they are mandating that people wear masks, whereas, we're the ones who have to pay. And our SLA and our license get taken from us. And we're the ones of the police people. So it's no longer about the customer is always right for us anymore. You know, we're yelling at them to not get off their seat, to sit down, and all of that. Whereas the rest of New York is not doing so.

JULIE HYMAN: Yeah, it's a tough situation. And Sanjay, we wish you best of luck at this time. And hopefully, everything will go smoothly and capacity will be back up in a short period of time. Sanjay Laforest, [INAUDIBLE] Group founder and owner. Thank you again for your time. And again, good luck.