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05-05-2020, 11:30 AM #1
Reputation points: 1960
- Join Date
- Oct 2019
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- 49
Dine in Restaurants the ones that will survive will not take years to recover, they will take 4-8 month's given if these sick people stop with the fear factor of the virus, LET'S GET AMERICA OPEN AGAIN.
Delivery has its place but will not be a game changer for restaurants. Delivery will always be here but will be restructured from the current pricing models that these companies have. 20%-30% commissions to restaurants for delivery is not sustainable.
Delivery is not the salvation for restaurants in the future, the restaurant itself is. We like to go to restaurants for the experience, we like to be served, the ambience. Delivery will be an important part of the equatuion.
Restaurants dine-In or Quick Service operate on a profit margin average of 25%-30% depending on the type of restaurant, fine dining profit can be much lower. Labor cost alone is 30%, food cost another 25%-30% premium cost 12%-18% so put on top of that the delivery commissions of 25%-30% for door dash is not good, something is going to give and that is the delivery fees. The companies like Door dash, GrunHub etc., their day of reckoning of high commissions are coming to an end, they will get much lower. This is exactly what happened to GROUPON not sustainable. RESTRUCTURE WILL HAPPEN. FOOD DELIVERY companies are a sham for restaurants, they get all the profit and they own the data, what a scam, Groupon all over again.
Now, we try to go with an MCA/Term Loan of 35%-45% interest payback? you can read the numbers! it makes no sense for the survival of that restaurant!, dah!!!
Ghost Kitchens not ghost restaurants , yes these started popping up years ago but more rapidly in the last 3 years, they will have their place.
Most small chains and mom and pop restaurants do not even want to talk about inventory management, Food/Recipe Costing, , vendor management, food waist management is not even practiced, why seems time consuming and complicated, they are going to need help and training. This will be a service and sought after for those who understand it, we are well positioned for this.
Also very attractive tax credits are coming their way. This will absolutely give great incentives to the B2B to fuel the restaurant industry. Tax credits for restaurants and tax credit for business owners (you & me) for dining.
Debt, loans will make no sense unless its sustainable payments.
People, please don't believe the doom and gloom. We will be back, maybe not 100% but close very very quickly.Last edited by inacio; 05-05-2020 at 11:53 AM.
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05-05-2020, 11:35 AM #2
Reputation points: 338677
- Join Date
- Mar 2015
- Location
- Boynton Beach
- Posts
- 3,486
Kevin Henry
VP-Business Development
Seacoast Business Funding, a division of Seacoast Bank
561-850-9346
Kevin.Henry@SeacoastBF.com
1880 N Congress Ave., Suite 404
Boynton Beach, FL 33426
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05-05-2020, 03:15 PM #3
Reputation points: 503040
- Join Date
- Oct 2016
- Posts
- 4,318
Restaurant profit margins aren’t 30%. Nowhere near. They’re usually less than 10%. Now factor in restaurants losing half their seating for social distancing. Also add in fact that people may not necessarily want to dine-out as much as before over both health concerns, and the fact we’ll have extended high unemployment and less disposable income. You really don’t think this will lead to a ton of restaurants failing? Come on now.
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05-05-2020, 03:39 PM #4
Reputation points: 338677
- Join Date
- Mar 2015
- Location
- Boynton Beach
- Posts
- 3,486
Meanwhile.... Some were slow to pay rent in March. Most did not pay rent in April or May. Eviction notices will start fling in June and July. The owners of the buildings don't necessarily want to file eviction, but will to keep their lenders at bay.
Before you start advancing on restaurant receivables, you might want to make sure they are paid up with rent.
Oh....and if you think their suppliers are going to keep the same N30 terms you are dreaming.Kevin Henry
VP-Business Development
Seacoast Business Funding, a division of Seacoast Bank
561-850-9346
Kevin.Henry@SeacoastBF.com
1880 N Congress Ave., Suite 404
Boynton Beach, FL 33426
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