The state of the restaurant industry

Re:The state of the restaurant industry by smallgovt on Wednesday March 18, 2020 @01:08AM (#22613808)

I think you're overestimating the magnitude of lost revenue. We're talking about 1 month of lost revenue.

A profitable restaurant's unit model might be: 10% net profit, 30% COGS, 30% fixed cost, 30% labor cost

During this one month shutdown, the restaurants won't incur labor cost or COGS. So, they're really only in the hole 30% of one month's revenue. With a little back of the envelope math, you'll see that the restaurant owner can pay back a loan for this amount by allocating 10% of their monthly profits (or 1% of monthly revenue) to loan payback.

Now, if the restaurant is NOT profitable, then we have a problem. But, they were probably going to go out of business soon anyways in that case.

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Re:The state of the restaurant industry by imtringued on Wednesday March 18, 2020 @11:19AM (#22617575)

You're forgetting that businesses can jack up prices after a crisis. Let's say there are 10 restaurants. One of them survives because it has taken a loan and others just crumble. Suddenly all the competition is gone and people are storming your place.

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