5 Ways Texas’ Reopening Could Destroy the Restaurant Industry

courtesy Trinity Groves
Dining rooms in Trinity Groves will open Friday (up to the 25% capacity). Thankfully, it won't look like this.
Friday, Texas restaurant dining rooms will be allowed to reopen, if they wish, up to 25% of their capacity limits. Gov. Greg Abbott announced the reopening as part of a gradual, phased reopening of the state.

The reopening plan seems destined to fail as the coronavirus returns. Cases of the disease have not yet begun to decline in Texas, which now has fewer COVID-19-free counties than ever. The state has tested only about 1% of its population. A report published by Dallas County on April 24 shows that we’ve yet to show a meaningful decline in cases locally.

In other words, reopening a restaurant may be a poor choice. But that doesn’t begin to describe the impossible situation into which Texas’ allegedly pro-business government has placed its most vulnerable small businesses.

Restaurants and their employees will now face rising costs, safety and enforcement problems, and potentially showdowns with unsympathetic landlords. Abbott has set restaurants up to fail.

Here are five ways the state government’s rush to reopen can damage a small restaurant business.

1. Landlords and insurance companies have greater leverage.

Many Dallas-area restaurants used the statewide shutdown and federal disaster declaration to get help paying their rent. Some landlords offered discounted rents; at least one restaurant effectively deferred its lease by getting three months of rent free now in exchange for three more paid months at the end of its agreement.

But now that Texas isn’t shut down anymore, landlords may be less forgiving. They certainly have more leverage to demand payment, and they might be happier to evict small businesses, knowing that it is technically possible for a new business to move in.

Insurance companies can rejoice, too. If a Dallas-area restaurant seeks disaster insurance coverage for losses during the statewide shutdown, that’s one thing. But seeking disaster coverage while the state government says that everything is totally fine? Good luck with that.

2. An open dining room is an enforcement nightmare.

Restaurants have to limit their dining rooms to 25% capacity. How do they do that? What if customers refuse to leave? What if a restaurant refuses to seat dine-in customers, but an angry visitor demands to be seated? Does every customer have to wear a mask when they’re not eating?

Does every business in town need to hire bouncers?

But the problem isn’t just with customers. What if rogue business owners decide to flout the rules by seating full dining rooms? What about Dallas city health inspectors, who are already overworked, understaffed and underfunded?

Making matters worse, the state of Texas offered just four days’ advance notice before dining rooms can reopen, nowhere near enough time to develop a safe operating plan. Businesses that decide to open their doors Friday will be, effectively, improvising.

That sounds safe.

3. The 25% capacity dining room is a financial trap.

Many Dallas-area restaurants have created takeout business models that work for them. Often running tiny staffs — say, two cooks and one person to run the credit card machine — they operate with lower costs and open only at the hours when takeout orders are at their peaks.

If a restaurant reopens its dining room for a small handful of customers, that math changes dramatically. It will need to hire back servers, bussers and (if needed) bartenders. It will need to run more dishwasher loads, turn on more lights and print more disposable menus. Operators will have to order vastly more hygiene equipment. They might need bouncers.

And all that to achieve something that has never, ever been profitable for a restaurant: a mostly empty dining room.

For a handful of businesses, the 25% capacity requirement will be workable. I suspect that some barbecue joints with outdoor seating will do well, because barbecue doesn’t require sophisticated service and tables are often far apart. (Picnic tables will need vinyl covers, though.)

But just try to imagine a fine dining restaurant, a neighborhood bistro or a mom-and-pop spot that has to pay additional employees to clean down tables, take orders and eject troublemaking customers, all so that they can seat, say, three tables at a time.

A lot of owners are going to gamble on reopening, and many of them will lose.

4. Peer pressure will escalate.

I’m concerned we’ll see a disparity in which restaurants open up. Big, investor-driven concepts awash with cash will reopen, as will businesses operated by owners who aren’t concerned about public health and safety.

Meanwhile, well-intentioned restaurants that are concerned about hygiene or finances will stay closed. And peer pressure from the public will mount. Customers may start demanding to be seated, or asking questions like, “Trinity Groves is open. Why aren’t you?”

The Texas government’s decision to reopen dining rooms, probably long before it’s safe to do so, will put responsible small-business owners on the defensive. They’ll be forced to explain themselves for making the safe, sane decision.

5. Customers and employees will get sick.

Oh, and the big cloud hanging over all of this: People are going to get coronavirus inside restaurants.

I keep thinking back to something that Jimmy Contreras, owner of Taco y Vino, told me: “That’s the scarlet letter for your restaurant, if someone gets sick there.”

If a restaurant contributes to coronavirus spread, or if patients traced to a restaurant die, there will be headlines. Imagine it: “Two Virus Deaths Linked to Dinner at (Your Favorite Place).” Can that business ever recover?

The urge to reopen a dining room is a trap. If you own a restaurant, bar, brewery or other food-service establishment, please hear this: Trust medical professionals, not politicians who may be recklessly gambling with our lives. Do not reopen.

But, if you own a food-service business, please also hear this: I feel for you. Texas’ government is trying to stamp you out.