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During the COVID-19 Pandemic, Independently-owned Restaurants Stand the Greatest Chance of Collapse

On its final day of lunch service in March, Local Yocal BBQ and Grill was packed with guests. An offshoot of Local Yocal Farmers Market, it’s located in downtown McKinney, the heart of an artistic small restaurant community north of DFW.
Courtesy of Local Yocal

 On its final day of lunch service in March, Local Yocal BBQ and Grill was packed with guests.   An offshoot of Local Yocal Farmers Market, it’s located in downtown McKinney, the heart of an  artistic small restaurant community north of DFW. There were few signs that everything was about to change. It was just another lunch service, full of people eating smoked onion dip, wagyu burgers, and plates piled with brisket straight from the pit. 

 Head Chef Adam West was staring down a restaurant owner’s “worst fears coming true.” He’d sensed the pandemonium and underlying fear in McKinney’s restaurant community, despite their best efforts to stay positive. He was thinking about their servers who would be losing the cushion of tableside tips and about the staff that would have to be cut down, because no matter how careful they were in the coming weeks, they would likely still have to fire people. 

“How long will it take [to reopen]?” he asks. “No one has the answer. It’s really sobering. When the big scare came out, and there were mumbles about closing restaurants, we got on a conference call and made a plan of action to survive.” 

COVID-19 loomed like a tidal wave. Two months later, they, like the rest of us, are still waiting to be told the worst is over. 

Close Your Doors

2019 was an excellent year for the DFW metroplex’s culinary scene. Dallas was made Bon Appetit’s 2019 Restaurant City of the Year. Food writers in the metroplex were ecstatic—we already knew how fantastic our chefs were—and innovators like Misti Norris, Donny Sirisavath, and Anastacia Quiñones were finally getting the praise they deserved.

“Dallas' community of highly ambitious chefs, hailing from all different backgrounds, working independently and yet with a palpable sense of synchronicity,” Bon Appetit wrote in September. These chefs are ditching the large-scale restaurant group models of yesteryear and instead forging their own paths, creating highly specific, highly personal spaces that feel more like stepping directly into said chef's brain.”  

In a cruel twist, the model that was just months ago our biggest strength, is now our greatest weakness. With the COVID-19 pandemic forcing restaurants across Texas to close their doors, it’s the independently owned, chef-driven restaurants that stand the greatest chance of collapse.

Marta Gómez Frey, the director of the Collin County branch of the Small Business Development Center, has never seen a crisis quite like this one. “We are definitely seeing a lot of businesses panicking—and rightfully so,” she says. “Some are shutting downs; others are seeing it in the foreseeable future.” 

Usually, the SBDC helps advise small businesses on how to create manageable growth, apply for loans, add employees, and deal in the day to day. The best part of Frey’s work is seeing someone come in with a dream, and make it into a reality. But these days, it’s a different story. Business owners call, asking for ways to reduce costs and save money, wondering what to tell their employees, and how to ask for loan payment deferment. 

Restaurants around the metroplex are in trouble. As a frequent customer of Mudleaf Coffee, and subscriber to their email list, I received a mass letter about their situation a week into the restaurant closures from Owner Kat Smith: “I have spent the last couple days crying, first alone, worried about everything. Then, with staff, as some willingly gave their hours to others who needed them more,” she writes. Despite investors who have paused payments, Smith is  frank: every day they must bring in $800 a day in sales. They set up a Venmo account solely for staff tips, and asked customers to buy gift cards from the safety of their homes, take advantage of to-go options, and order delivery. They also asked customers to do what they can for Lily’s Cafe, the quiet breakfast restaurant next door. A few days later, there was another email from Mudleaf. Their customers had responded, and the sales for the next two days had been well over the $800 a day they needed.

Marta Frey says that this kind of heartbreak and worry is typical because many small business owners don’t have savings. “They have poured all of their resources into growing their business,” she explains. In a crisis like the one caused by the spread of coronavirus, small businesses will inevitably take a hit, which is likely why the City of Frisco held out as long as they could before closing restaurants and bars. 

According to a March 19 NPR report on the impact of COVID-19 on the food and beverage industry, halfway through March, the coronavirus pandemic had already started to hit America, with nearly one in five households experiencing a layoff or a reduction in work hours. When people suddenly lose a steady income, they stop spending leisure money. “Restaurants, bars, hotels, and airlines are among the hardest-hit industries, but the ripple effects of the drop in demand are expected to spread across virtually the entire economy,” NPR wrote. 

In a March 18 press release, Mayor Jeff Cheney said in part, “Our medical expert, Dr. Mark Gamber, agrees restaurants pose no greater risk than a gaming store, grocery store, or other retail locations. We’re choosing to take a tempered approach.” He called on citizens to take “personal responsibility” to help contain the outbreak. It’s no easy thing for any city to order complete shut downs. Despite the necessity to contain the vicious spread of COVID-19, it’s a decision made knowing that many restaurants that close their doors will never reopen.

A day later, Gov. Greg Abbott announced the statewide closure of restaurants and other businesses.

Fighting for Survival

Ever since, in response to government restrictions related to coronavirus, Local Yocal has been offering delivery service from their two locations, Local Yocal Barbecue and Grill and Local Yocal Farm to Market, to residents living in McKinney and the surrounding areas. Their most important idea was turning their servers into delivery drivers. “We never wanted to use Grubhub, etc. We have enough mouths to feed as it is, and we don’t want to give away our revenue when we can keep it internal,” Chef West explains. 

When they proposed the shift to their waitstaff, not a single server said no. The pandemic isn’t a localized event. A furloughed food service worker can’t drive two cities over and find another job because no one is serving food inhouse anywhere. 

Local Yocal is also selling cases of produce; they aren’t the only ones catching on to the quarantine grocery kit trend. FrontBurner restaurant group, which operates local favorites such as Legacy Food Hall, Haywire, Sixty Vines, Whiskey Cake, Mexican Sugar, and The Keeper, launched an array of quarantine boxes across the metroplex. In Plano, Whiskey Cake got attention by padding boxes of marinated chicken, ground beef, and vegetables with toilet paper. In less than a week, Kenny’s East Coast Pizza announced a similar campaign. Ebesu Sushi and Robata, a high end Japanese restaurant in downtown Plano, has been advertising bento box specials to encourage carry-out orders at lower and lower prices.

Despite all the innovation, the National Restaurant Association has reported that since the first of March, the industry has lost over 3 million jobs and $25 billion in sales.

Chef West is aware that Local Yocal Barbecue and Grill is relatively lucky: it’s one part of a three-pronged business. While the restaurant has been crippled, the Local Yocal farm-to-table market and butcher shop are having their best, busiest weeks since the holiday season. When grocery store shelves are empty, customers come to Local Yocal’s market and find full shelves. Because it’s a smaller business model, they’re able to adapt and restock much more quickly. “We’re not a cruise ship; we’re a jet ski,” as he puts it. They also opened a food truck featuring Local Yocal’s signature smoked barbecue by the pound including brisket, jalapeno cheddar sausage, and smoked turkey. 

It’s especially crucial for restaurants to take care of as much of the staff as possible. 

Local Yocal is able to cross-train staff from the restaurant to work at the butcher shop starting tonight and tomorrow. “Anyone in the kitchen who can cut meat,” Chef West says, “is going to assist.” Others are being funneled into the food truck. 

It’s the small things that keep Chef West going. One day, before closing their dining room, a man came in for lunch and left a $100 tip for all the servers. “That’s exactly what we needed,” Chef West says. 

He recalls talking to some of the other restaurant owners in the downtown McKinney area. For example, Rye, a unique small plate restaurant, has been offering similar meal kits with entrees like chimichurri hanger steak and Asian Brussels sprouts salad. They source locally and have also been giving as much attention to local farmers and suppliers. He confirms that everyone is in the same state of utter concern.

“There’s not a lot of conversation to be had,” Chef West says “You’re buying to-go boxes and firing people? Same here. Hope to see you on the other side.” 

Near the end of our conversation, West adds that they are also delivering beer and wine. They even have a craft beer six pack for $15, full of craft beers that aren’t sold in stores, allocated only to restaurants. It’s a good deal, he says; at the table, the prices for six beers would be closer to $40. Anyone who orders the six pack gets six local, craft beers selected at random and “you get what you get and don’t throw a fit. Whatever we can do.” 

Just days after the City of Plano ordered all restaurants to shut down, with the exception of takeout and carryout, Sip & Savor, a quiet seafood restaurant in a historic house, announced that they were closing permanently. They used to serve delicious scallops, seared crisp, lovely gold on both sides, but they knew they wouldn’t be able to make it to the other end of the crisis. 

According to Rally for Restaurants, a grassroots initiative made of restaurant technology providers, public and private companies, and restaurant owners, sales across the country are down as a result of COVID-19. Comparing daily restaurant sales in 2019 to those in April 2020, DFW restaurants are experiencing a huge dip. On its best day, April 19 sales were down by 46 percent; on its worst, April 12, sales in the area were down 77 percent.

The heavy hitters—the Chili’s, the Whataburgers, the Chick-fil-as—they will lose a couple of stores in a few cities. But independent restaurants stand on the brink of losing everything. 

“What will keep restaurants from closing their doors is remembering these independent restaurants,” Chef West says. “We need the support of the community.”

Originally published in the May/June issue of Local Profile.