# Our time



## Pelngshrmp4evainhell (Mar 19, 2020)

In this difficult time I would like to remind everyone that when this is over, it will be an employer’s market.
There are far too many bad restaurants and bad employees in our club.
This can be the rebirth of the American restaurant if we think About it.
I hope we all take responsibility to leave the trash on the government tit when we rebuild.


----------



## Seoul Food (Sep 17, 2018)

I hope you are right, as I would be afraid with so much private competition going under it would pave the way for a mass market of chains.


----------



## phaedrus (Dec 23, 2004)

I expect the industry to emerge bruised but not decimated. The worst run (and the unlucky) will fail but I think we can expect a pretty big bailout in the very near term.


----------



## Seoul Food (Sep 17, 2018)

phaedrus said:


> I expect the industry to emerge bruised but not decimated. The worst run (and the unlucky) will fail but I think we can expect a pretty big bailout in the very near term.


It worries me though that so many industries cannot survive without a bail out by the government. (Air travel, banks, misc. small businesses.)


----------



## phaedrus (Dec 23, 2004)

I think our industry is extraordinarily vulnerable. It's no secret that restaurant margins are thin and restaurants need a constant cash flow to stay afloat. A poorly run business in a great economy can stumble along for awhile. But when everyone is sheltering in place by legal mandate and your customer base drops to zero it's hard for even a very good business to weather the storm.

But it's true that there's a moral hazard argument to be made for some of the bailouts. The airline industry has use 95% of profits over the last decade for stock buybacks that benefit only executives. They could have billions of dollars in cash but they chose to inflate their stock price instead. Note that once a stock is sold, that's the last time the stock actually makes money for the company. If the price of the stock goes up it can benefit those holding the stock when they sell it but it's not really infusing the company with any cash. 

Yet it's a no-brainer to use profits for bonuses and buybacks when you know you're too big to fail. They can always count on public resources being used to bail them out if they screw up badly enough.


----------



## Seoul Food (Sep 17, 2018)

I agree when the economy is booming it makes it easier for sub par places to coast by. What was disheartening was hearing and reading what some people (who obviously have no idea about running any sort of restaurant venture) were saying that they didn't understand how some small businesses couldn't go months on end with no income. I think the perception of the general population is that restaurants are somehow cash cows. (I know some businesses do very well, but I would venture to guess that the number percentage wise of total businesses excluding franchises like McDonald's are in the median area for profits.)


----------



## fatcook (Apr 25, 2017)

I think people who have not ever owned their own business do not have any idea what does into it and how little comes out. We are holding on due to already having been a take home source of food. We've lost most of our wholesale for now, but retail is holding steady - although everything takes longer now due to added logistical requirements and increased communication needs. 

The customers have been patient and cooperative for the most part, though we are getting a lot of "you shoulds" from people who have no idea how things work. We try to remember they come from good intentions (mostly).


----------



## cheflayne (Aug 21, 2004)

fatcook said:


> We try to remember they come from good intentions


As long as they have cash.._.it's all good!!!_


----------



## redbeerd cantu (Aug 7, 2013)

I think that without a major paradigm shift in the way the economy is designed in US, this will all happen again. 

This business, at the independent level, carries on by the hair of its chinny-chin-chin, even when the business is doing relatively well. 11-15% actual profit margins, when it is taught in business school to make all calculations based around a 30-33% profit margin, is a sign of part of the problem. Illusion. I don't think there would be much independent business of any sort if we were told that 13% profits was a good day.

The sudden stoppage of all of these businesses is astounding. Apparently there wasn't a single business in this country that was able to carry on for even a month without making the largest of sacrifices. Us, the workforce.

The airline industry example above is an example of one of the most repugnant practices of big business, ignoring the most important aspects of business and throwing caution to the wind for profit. The took an influx of capital and used it to stuff their own pockets, and now they're begging for help in the form of taxpayer money...again. 

Paradigm shift.

As long as big businesses are allowed to carry on with such practices, and as long as those in power are allowed to speak to and receive money from lobbyists, who ensure that such practices are allowed to continue, this will all happen again. Our most powerful politicians profit from large business, personally. Unless there is a paradigm shift in the way the governance of this country is administered, this will happen again.

As long as The Fed is allowed to conjure up cash of its own volition, and send it into the economy in the form of loans through the largest banks, which trickles down to the smallest banks, who make it's poorest citizens promise to give up all of their property if they fail to pay, and they pay for it doing the most undesirable jobs for the longest hours and years for the least amount of money, this will happen again. As long as independent businesses are dependent upon loans and credit lines from the same banks, this will happen again.

One of the largest problems I have with how this country (indeed, world) is run, is how the average person's basic survival is inherently tied to the stock market. This idea is simply asinine. An entire society, most of whose citizens have neither knowledge of its workings, nor its potential impact on their lives, can have their entire existence upended by the performance of imaginary results which occur in a gambling den of gargantuan proportions. Illusion.

I think the current situation is an opportunity for economic reset, and I hope that the intellectuals at the top of the societal pyramid have a genuine interest in humanity and conducting its movement forward. Disasters of natural causes and man made causes have devastated the world with more frequency within the past couple of decades, and not a single thing was done to prevent the same thing from happening again. Big money and big business were rescued, with YOUR tax money, and whoever died, died. Why would we try to rebuild to the exact same thing again?

I just wanna start a business and work and be happy. But unless the largest and most fundamental of changes are made, this will happen again.


----------



## Seoul Food (Sep 17, 2018)

redbeerd cantu said:


> I think that without a major paradigm shift in the way the economy is designed in US, this will all happen again.
> 
> This business, at the independent level, carries on by the hair of its chinny-chin-chin, even when the business is doing relatively well. 11-15% actual profit margins, when it is taught in business school to make all calculations based around a 30-33% profit margin, is a sign of part of the problem. Illusion. I don't think there would be much independent business of any sort if we were told that 13% profits was a good day.
> 
> ...


Unfortunately it was the intellectuals at the top that created this mess to begin with. The average joe working a blue collar job isn't worrying about how to accomplish the same thing a business lobbyist is or a politician. These people operate on different rules than the rest of us and it will never change because people are inherently lazy and as this latest event has shown, are willing to give up power and freedoms for security and promises from the government. I never understood the stock market either, these people are supposed to be well educated but basically panic and mass sell if they think something might go wrong, creating a domino effect. I can't fault a business like the airline for doing what it did, it tried to get the most profit it could which is what a business is made for. The fault lies in the government for being so easily manipulated into helping these industries out. No one should be "too big to fail" and if you run risky business practices then you should suffer the consequences should something happen. It's all relative, a small business owner who invests their entire life and equity into a business and employs 5 people shouldn't be more penalized than a similar company who employs 50 or 500 people simply because of their economic contributions. All that does is make larger companies make riskier moves in order to expand and create this huge gap we have in industries at the moment.


----------



## chefbillyb (Feb 8, 2009)

The operators that were good before this started will survive after this is over. I really think we need to rethink how the reopening happens. There is no way in Hell we get back to the way we were in the near future. I think we were all push to delivery and pick-up from our favorite restaurant. This door as been opened and isn't closing anytime soon. It's time to think outside the box to get your customers back anyway you can. I think the home meal from restaurants is here to stay. Try to find a way to get these sales, this will be the way to survive. 

The Chain operations are will be hurt and agin only the strong will survive. The middle class are the ones who kept these place open. The middle class will be the slowest to regroup from this. The ones who survive will be the strongest ones going into this. 

Unemployment will be 10% or more for the next year. That will show the comeback isn't working and all businesses are not hiring their employees back to work. Every business will have to run lean. 

If we don't go into a full blown World depression I'll be surprised. The USA works on a World economy this isn't just a city and state problem, It's a World problem......


----------



## Seoul Food (Sep 17, 2018)

chefbillyb said:


> The operators that were good before this started will survive after this is over. I really think we need to rethink how the reopening happens. There is no way in Hell we get back to the way we were in the near future. I think we were all push to delivery and pick-up from our favorite restaurant. This door as been opened and isn't closing anytime soon. It's time to think outside the box to get your customers back anyway you can. I think the home meal from restaurants is here to stay. Try to find a way to get these sales, this will be the way to survive.


This was a long time coming. With delivery apps for restaurant and grocery stores, Amazon delivery and in-store pickup at Target and Walmart, the private food service industry will have to play a little catch up. For a little while now we have been hearing about "ghost" kitchens opening up around here to sustain the to-go orders (pre covid-19)



chefbillyb said:


> Unemployment will be 10% or more for the next year. That will show the comeback isn't working and all businesses are not hiring their employees back to work. Every business will have to run lean.


I agree it will be higher, but I think a lot of that depends on how they tally the first time or temporary claims. I don't know if we'll ever know the true numbers of how many businesses were basically shut down by the government. Also, it doesn't help when people are literally making more sitting at home than working. We've had people quit because of this very reason.


----------



## granola girl (Mar 8, 2015)

Seoul Food said:


> This was a long time coming. With delivery apps for restaurant and grocery stores, Amazon delivery and in-store pickup at Target and Walmart, the private food service industry will have to play a little catch up. For a little while now we have been hearing about "ghost" kitchens opening up around here to sustain the to-go orders (pre covid-19)
> 
> I agree it will be higher, but I think a lot of that depends on how they tally the first time or temporary claims. I don't know if we'll ever know the true numbers of how many businesses were basically shut down by the government. Also, it doesn't help when people are literally making more sitting at home than working. We've had people quit because of this very reason.


It is interesting that you touch upon Ghost Kitchens. Yes, the rent in LA area is cost prohibitive for many of the brick and mortars to stay in business. I am fortunate in that my lease doesn't charge me rent until the build out of my kitchen is done. I just spoke to the land lord about the concept of Ghost Kitchens since the unit next to me is vacant. I've been given permission to cost it out for the property management to see if the concept will be doable. I told them. with so many small biz restaurants going under at least the Ghost kitchen would be a place they cook legally cook and delivery from and retain their customer base. What do you think? win win? too risky?


----------



## Seoul Food (Sep 17, 2018)

granola girl said:


> It is interesting that you touch upon Ghost Kitchens. Yes, the rent in LA area is cost prohibitive for many of the brick and mortars to stay in business. I am fortunate in that my lease doesn't charge me rent until the build out of my kitchen is done. I just spoke to the land lord about the concept of Ghost Kitchens since the unit next to me is vacant. I've been given permission to cost it out for the property management to see if the concept will be doable. I told them. with so many small biz restaurants going under at least the Ghost kitchen would be a place they cook legally cook and delivery from and retain their customer base. What do you think? win win? too risky?


I think it won't hurt to do some costing, but the whole realty landscape may change after this and space may be even cheaper.


----------



## Iceman (Jan 4, 2011)

[JUSTIFY]*[SIZE=18px]Seoul Food[/SIZE] *... I'm so very sorry ... but I completely disagree with just exactly what businesses need any bail-out $$$. [/JUSTIFY]

[JUSTIFY]The airlines and banks are in the very bottom of my opinionated list. These are two(2) particular industries that have NO other motivation than _GREED_. After all the past bail-outs these companies put little or no $$$ back into their companies or less yet to their employees. What they did ... was buy back stock. The rich got richer and the employees took it in their shorts. RECORD buy-backs were the products of all the past bail-outs. Feel free to challenge what I'm saying by looking up the facts. WORKERS need bail-outs ... NOT big business. [/JUSTIFY]

[JUSTIFY]Sorry.[/JUSTIFY]


----------



## foodpump (Oct 10, 2005)

What will change if “things ever get back to normal”?

First, there is the whole tipping issue, which has never been addressed, and nothing about covid will address this issue.

Second, there is still no nationally ( for the U.S. anyway) recognized standard for a cook, or for that matter, a server, or an owner. This is probably the main reason why there are (were?) so many poorly run places in the first place

Without these two issues being addressed, nothing will ever change in the restaurant industry.


----------



## phaedrus (Dec 23, 2004)

As expected Domino's increased profits over the time of the lockdowns. Makes sense as they do almost exclusively delivery. Expectations from the insiders/experts is that 1 in 10 restaurants will never reopen, and that looks about right from here. On the one hand there was too much capacity and too much competition to begin with so the low hanging fruit got plucked. Probably some bargains out there for the hedge funds and private equity groups to grab up. The PPP was mostly a bust- somehow a ton of got funneled to companies that were already rich including some NBA teams and recording artists it would seem.

My favorite Chinese place seems to be emerging intact at least.


----------



## Seoul Food (Sep 17, 2018)

Iceman said:


> [JUSTIFY]*[SIZE=18px]Seoul Food[/SIZE] *... I'm so very sorry ... but I completely disagree with just exactly what businesses need any bail-out $$$. [/JUSTIFY]
> 
> [JUSTIFY]The airlines and banks are in the very bottom of my opinionated list. These are two(2) particular industries that have NO other motivation than _GREED_. After all the past bail-outs these companies put little or no $$$ back into their companies or less yet to their employees. What they did ... was buy back stock. The rich got richer and the employees took it in their shorts. RECORD buy-backs were the products of all the past bail-outs. Feel free to challenge what I'm saying by looking up the facts. WORKERS need bail-outs ... NOT big business. [/JUSTIFY]
> 
> [JUSTIFY]Sorry.[/JUSTIFY]


Not sure the confusion here but I'm saying that exact same thing. We are bailing out big companies while letting the little ones fend for themselves or die out.


----------



## mystickrewe (Apr 27, 2015)

Seoul Food said:


> It worries me though that so many industries cannot survive without a bail out by the government. (Air travel, banks, misc. small businesses.)


One of the problems with this is due to the nature of the corporate structure and taxation. If you spend all the money you make, you don't have to pay taxes on it, so many companies make it a policy of not holding onto cash reserves, because at this point, they lose 25% of it in taxes. Better to spend it on stuff and keep 100% of it. We really need some incentive for businesses to save money rather than spend it. Perhaps businesses could have some kind of 401K-like system that is used for emergencies that is tax free?


----------



## Seoul Food (Sep 17, 2018)

mystickrewe said:


> One of the problems with this is due to the nature of the corporate structure and taxation. If you spend all the money you make, you don't have to pay taxes on it, so many companies make it a policy of not holding onto cash reserves, because at this point, they lose 25% of it in taxes. Better to spend it on stuff and keep 100% of it. We really need some incentive for businesses to save money rather than spend it. Perhaps businesses could have some kind of 401K-like system that is used for emergencies that is tax free?


I know it will never happen but I wish they would just institute a flat tax already. You could even have a different percentage for business versus personal. Take away all deductions and just flat rate it based on a percentage so it doesn't matter how much or how little you make.


----------



## granola girl (Mar 8, 2015)

Seoul Food said:


> I think it won't hurt to do some costing, but the whole realty landscape may change after this and space may be even cheaper.


True. But my location is a gold mine cz it has 20 parking spaces in a gated private lot behind the building. Very rare in Altadena/pasadena to have that much parking. Planning on having food trucks overnight there.


----------

