Restaurants, small businesses face closures without COVID-19 relief


After shutting down negotiations over a new COVID-19 stimulus package, President Trump said he would pass a standalone bill for $1,200 stimulus checks.


Restaurants and small businesses across the USA say they face dire situations without additional federal relief to offset the effects of the coronavirus pandemic.

Concerns have grown as another aid package for businesses and struggling Americans appears to be in limbo.

President Donald Trump quashed additional relief discussions Tuesday until after the  election Nov. 3. Several hours later, Trump softened his stance, saying he’s open to approving $1,200 payments to Americans and limited programs to support the airline industry and small businesses.

As many as one in 20 U.S. small businesses face possible closure without additional assistance, the International Franchisee Association estimates.

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“36,000 franchise small businesses won’t survive the winter without additional relief,” Matt Haller, the IFA’s senior vice president of government relations and public affairs, said in a statement sent to USA TODAY. “Trading a broad, bipartisan bill now for the vague goal of something better after the election is like quitting a game in the third quarter. American small businesses want the government to work as hard as they do to support their employees, families and communities.”

As of the end of August, 32,700 franchised businesses have closed in the USA and lost 1.4 million jobs, the IFA said. About one-third of those businesses are closed permanently, and about 40% of the job losses are permanent, estimates the group, which represents restaurants, gyms, hotels, salons and spas, day care and other businesses and services.

Bloom’s Pizza in West Bridgewater, Mass., is “closed for business.” (Photo: Marc Vasconcellos/The Enterprise)

Restaurants have lost 2.3 million jobs during the pandemic, according to the Independent Restaurant Coalition. Overall, the economy has lost a record 22.1 million jobs since the spring but regained 11.4 million as of the end of September, according to the Labor Department.

Casual dining chain Ruby Tuesday filed for bankruptcy Wednesday and closed 185 locations. As many as 300 Pizza Hut locations, mainly dine-in locations, had closed by mid-August. Another chain, California Pizza Kitchen, filed for Chapter 11 bankruptcy protection in July and closed some locations. In May, Steak ‘n Shake closed 57 locations.

Other chains such as Applebee’s, The Cheesecake Factory, Denny’s and Outback Steakhouse were considered by S&P Global Market Intelligence at the highest risk of being unable to pay back their debts because of pandemic challenges. Defaults can lead to filings for bankruptcy protection, closed locations or occasional liquidations.

Additional aid is extremely important as restaurants face cooling temperatures that could reduce outdoor dining options. 

“If Congress and the President walk away from negotiations, even more of our neighborhood restaurants will go out of business,” leaders of the Independent Restaurant Coalition said in a statement Tuesday after Trump’s announcement about stopping relief talks.

The IFC supports passage of the Restaurant Revitalization Fund, a $120 billion provision in the Heroes Act, passed last week by House Democrats. Up to 85% of independent restaurants could close permanently without passage of the fund, the IFC estimates.

Follow USA TODAY reporter Mike Snider on Twitter: @MikeSnider.

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