This is the story of two Phoenix establishments. One has been a fixture in downtown Phoenix for almost 12 years while the other has enjoyed a stellar first year in business, even collecting the Phoenix New Times Best New Bar Award in 2019. One made the tough decision to shut down during the COVID-19 pandemic while the other tries to survive on take-out alcohol and free toilet paper orders .
Both companies face a dilemma. Should they stay open and switch their business model to take out, curbside and delivery orders, or shut down altogether? Should they apply for a loan while competing against bigger restaurant names? If they receive the loan, can they use it effectively or will the restrictions make it virtually useless?
Danielle Leoni, co-owner of Breadfruit & Rum Bar, explains that life as she knew it effectively came to a halt in mid-March when restaurants and bars switched to take-out and delivery. “The mayor first said that restaurants should close before the governor does, so we were responding to the mayor’s proclamation,” she said. “But at the same time, our restaurant has seen tremendous momentum.”
With surplus food on hand – in anticipation of March being one of their busiest months as well as twice-weekly food deliveries – Leoni and her restaurant partner / husband Dwayne Allen quickly moved on to take out. . But, they haven’t had much success. After some internal struggles, they decided to lay off the staff while still keeping the take out orders – just the two of them. It was especially difficult, as Leoni was never a fan of take out.
“I’m not a proponent of that. I just think if you have time to eat you should come in and eat, and if you don’t have time to eat then you just don’t have to. take care of it., “she says.
Then, with just a few take out orders in a day, Leoni and Allen decided to shut the restaurant down entirely on March 19. “We decided that this would be our last night, as it is physically exhausting to open the restaurant and stay there all night. And cook everything and rush from one end of the restaurant to the other and the cooking, and calling people, ”Leoni says.“ And we worried that our guests weren’t standing six feet apart, worried that our guests were gathering in our dining room . So many worries, and in the end, why? ”
Later that night, Leoni’s mind raced and she couldn’t sleep, but inspiration started to flow.
“Suddenly my world is out of control. What has to happen for us to bounce back? For example, what do I need to be able to come out of this crisis successfully?” said Leoni. “And I wrote this letter to Doug Ducey.”
This letter marked the start of the Arizona Small Restaurant Coalition created by Leoni on March 21. The online form now contains a long list of supportive catering establishments across the state. Leoni also helped get Ducey to include a moratorium on business evictions as part of his executive order.
Thunderbird Lounge co-owner Jeremiah Gratza has conducted business in a slightly different way.
“Mayor Kate Gallego said all bars and restaurants were to close on St. Patrick’s Day; this was roughly the last day we were fully operational,” Gratza said. “The next day we decided to switch our business model to delivery and take out, and we had actually just ordered a bunch of toilet paper that weekend, so we decided that for everyone who was going to order the pickup and delivery we were I will also give a free roll of toilet paper. ”
Prior to opening Thunderbird Lounge in April 2019, Gratza cashed in his 401K and savings account, among other things. The bar became an instant hot spot and the team were looking forward to a busy season for spring training fans, out-of-town visitors and bar terrace fans. But now Gratza and the other two owners are counting on their first year profits.
Restaurant, bar, and restaurant owners are used to living paycheck to paycheck and handing over most of the income back to businesses, but the COVID-19 shutdown has turned out to be a whole different beast, especially when it comes to obtaining the funds pledged through the CARES Act for Small Businesses, in particular the Paycheck Protection Program (PPP). There was frustration everywhere, especially for Gratza who applied for a PPP early in the application process, but was not selected.
“We decided to stay open to make sure our employees could still get paid and pay their rent and everything, so we went for the PPP and thought we had a good chance and we were there,” Gratza said. However, Thunderbird Lounge did not qualify for the first round and the money ran out.
“We had literally received our request within the second you could receive it; there was no hesitation and no expectation on our side. We got it ASAP, and it always ran out. ”
With another round of loan applications, Gratza says they’re trying to stay positive while finding creative ways to connect with clients. They recently partnered up with a local Scottsdale bookstore and handed out a free book in exchange for purchasing a bottle of liquor. They started a delivery route west of the valley. They have remained active on social media, and yes, there is always toilet paper available.
Leoni has just received the PPP in his bank account but does not know how to manage it. The rules state that 75 percent allocated must go to payroll and the remaining 25 percent can go to costs such as rent, utilities and open bills. She knows she will pay rent to her landlord immediately, but currently has no employees to pay. A large part of its staff have applied for unemployment and can earn more income than before at the restaurant.
“And then they can get out of unemployment which is difficult to mount, I’m going to hire them, and then I’m going to have to put them all on leave or fire them again, because my restaurant is not open,” Leoni said. “It seems I’m doing them a disservice by asking them to quit unemployment, give them that money, and then let them go again. It just doesn’t make sense, and we’re just going to overload our unemployment system again.”
Another option would be to try to start his second business and hire some of his former employees. Big Marble Organics is Leoni’s soft drink company – set up in a warehouse right next to The Breadfruit which was due to open in March. Its main product is a spicy Jamaican-style ginger ale originally crafted behind the Breadfruit bar.
Leoni has no plans to reopen the Breadfruit until Governor Ducey reopens the state. But even then, she sees looming problems.
“Who wants to be in a dining room with a bunch of strangers breathing on top of each other, and you can’t eat with a mask on?” »Said Léoni. “So my staff will have to wear goggles and respirators because people are breathing in my tiny dining room?” I don’t know or trust breathing in air, and now what, I also have cooks in a 90 degree kitchen with goggles and masks? I mean, why?
Back in Thunderbird, Gratza says they’ll stay open for as long as possible.
“We always prefer to offer something for the money,” says Gratza. “It might be only 10 percent of what we’re used to, but that 10 percent is still enough to pay our employees… it’s the only job they have.”