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By Tiffany Regaudie
“It’s one thing to see a hurricane on TV. It’s another thing to drive down the street and see first hand what a hurricane has done to your city.”
Hurricane Harvey isn’t Martin Lowe’s first experience with a natural disaster. He remembers Tropical Storm Allison in 2001, which killed 41 people and decimated homes and businesses across Texas. Now Houston, the fourth largest city in the United States, is in the midst of recovering from one of the most devastating hurricanes to touch down on American soil in a decade. So far Hurricane Harvey has claimed 72 lives, and economic losses have been estimated at $70 to $200 billion.
Martin, owner of Fork & Truck food truck in Houston, says he feels lucky: his food truck is insured much like a car. If your car is flooded during a hurricane, insurance will cover the cost. “And as a restaurant owner,” Martin says, “it’s much easier to own a food truck than is it to own a building. When you don’t own your building – as most restaurant owners don’t – the cost of damages is usually passed down to you from your landlord in higher rent. If you’ve sustained damage to your equipment and loss of product, it can be very difficult to recover. A lot of restaurants can’t withstand the hit and will go out of business.”
The restaurant industry in Texas is beginning to feel Hurricane Harvey’s ripple effect. Bonnie Riggs, analyst at The NPD Group, told CNBC, “We know what happened to the industry when Katrina hit, but this is far greater.”
Reporter Sarah Whitten also notes that “the majority of relief efforts will be geared toward rebuilding homes, not businesses. So, restaurant owners who are unable to finance the restoration of their location may be forced to stay closed longer or shutter their business altogether.”
So this leaves us with three questions:
Here’s some advice from Martin, who wants to help other restaurant owners prepare for future natural disasters.
Hurricane preparation 101: board up your windows. A strong storm surge can crash through your windows and leave the inside of your restaurant vulnerable to the elements. If you want to reduce water and wind damage to all of the expensive items inside your restaurant, boarding up your windows is the first step to protecting your business.
If you’re in a hurry and haven’t purchased custom-fit hurricane windows, plywood is your best bet. The Federal Alliance for Safe Homes (FLASH) recommends buying sheets of plywood that are at least 5/8 inch thick. Make sure you measure each window in your restaurant and then add eight inches to both the height and width of your plywood for a four-inch overlap on all sides. Then make sure you’ve screwed or bolted each piece of plywood to the outside of every window – do not just tape it in place.
“Getting your hands on product is extremely difficult after a hurricane,” Martin says. “As soon as I heard Hurricane Harvey was approaching, I took all of my perishable items and stored them in my freezer. You can lose thousands of dollars in waste on top of damages if you don’t take this step.”
While Martin acknowledges that reducing waste by freezing product is dependent on the power staying on or owning a generator, he says the method may still tide you over if power outages are intermittent. To save smaller amounts of product, you can also buy coolers and ice, or pack your freezer with as much ice as possible to extend the lifespan of your freezer during a power outage.
Don’t ask your employees to work when a hurricane is approaching! Even if you think the storm is going to be light that day, you’re putting your employees at risk if you ask them to come in. “I cancelled a bunch of jobs just before the hurricane really hit,” Martin says. “I could have probably taken out my food truck, but nothing was worth putting any member of my staff at risk. What if the storm path changed and we got stranded somewhere? This is life and death, and it’s not worth making a few bucks if my staff don’t feel safe.”
Remember: how you treat your staff during a crisis is something they will remember. Think of an environmental crisis as an opportunity to show your staff how much you value their well being. If they know you care about their safety more than the bottom line, they’ll appreciate this after the storm is over – and perhaps work harder for you during the aftermath when you need them most.
You won’t be bringing in any revenue during a hurricane. This means you’ll want to keep your operational costs as low as possible, so unplug all your equipment, turn off your gas, and shut down all the lights before you leave the building. Power outages are unpredictable during a storm: don’t waste electricity when you’re not bringing in any business.
If somehow your building is breached by the storm, what’s the last thing you want? Broken bottles and spilled liquor that can’t be served. Store your liquor bottles in the basement or dry storage area to minimize waste, and to give you a head start when your restaurant is able to re-open after the storm.
Remember: Your safety is priority number one. We know the thought of losing profit during a hurricane is a tough pill to swallow. But don’t get so caught up in preserving your business that you lose sight of what’s important: your safety and the safety of your staff.
“I definitely know a few places that opened way too early,” Martin says. “Those places were endangering their staff, and they got a lot of backlash from the community for putting profit ahead of their employees.”
So consider this: staying open during an environmental crisis can also put your reputation at risk.
The unfortunate reality is that many restaurant owners don’t own the building of their restaurant, so they are at the mercy of their landlord – who often raises the rent after a hurricane to make up for damage costs.
Another harsh truth is that many insurance companies don’t offer plans for loss of business due to natural disasters – and those that do only cover “direct” losses as opposed to “indirect” losses. This is where things become unclear.
According to Hub International, “a hurricane knocks out power to a restaurant and all the food in the coolers goes bad. Not only is it unclear whether the spoilage is a direct loss, it’s also debatable whether the power outage loss is ‘physical’ because the building itself did not sustain any damage from the hurricane. Because policies don’t define the word ‘physical’, it’s been left to the courts to sort out what does and doesn’t qualify as a direct ‘physical’ loss and surprisingly there’s little consensus on the issue.”
So while you may be able to prove over time that the losses you suffered were a “direct” result of the hurricane as opposed to the “indirect” result of a loss of power due to the hurricane, several months may have gone by and you haven’t been able to recover enough revenue to stay open.
Here are some helpful websites that can provide more information if your business is in Texas:
Texas Department of Insurance
Coverhound’s Business Insurance Comparison
Insureon’s Restaurant Business Insurance Comparison
Another solution is to have a reserve fund. We know it’s next to impossible for many smaller restaurants to set aside an emergency fund, but running a few extra special events or promos throughout the year can help build your fund over time so you don’t have to worry so much the next time disaster strikes.
“Restaurants definitely need our help right now,” Martin says. “Many restaurants in Houston were closed for up to five days during the hurricane, which means a lot of lost income. Hurricane Harvey is going to force some small restaurants to close, and that is heartbreaking.”
If you’re in Houston or one of the many areas in the southern U.S. that have been affected by a hurricane, here are some small ways to help support the industry.
If you’re in a financial position to do so, you can help restaurant owners just by going out to eat. Consider independently owned restauarants when making decisions about where to dine; small restaurant owners are taking the largest financial hit after the hurricane, and you can help support them just by deciding to eat their food over that of their larger competitors.
“If you’ve ever seen a front of house paycheck in Houston, you know it basically doesn’t exist,” Martin says. “The serving staff here live on tips alone, which means that thousands of people in the area have lost a significant amount of income.”
The next time you’re at a restaurant, be aware that your server likely lost income during the hurricane. Give an extra five, ten, or even one hundred dollars if you can afford to. They’ll appreciate the help and likely want to show that appreciation the next time you come in.
Donating to the Red Cross is always a great option when it comes to supporting disaster relief on a larger scale, but you may also want to check in with people you know about what they’re doing on a local level. Is someone you know running a GoFundMe campaign to raise money for a local business? Ask your friends in the restaurant industry if someone is on the brink of closing and just needs an extra financial boost to stay open. Community support is vital after a natural disaster, and you have the power to contribute after you’ve taken care of yourself and your family.
Martin leave us with this – the reminder that even in the face of disaster, communities have the ability to rise up and stand strong:
“Texans are a proud and helpful people. Hurricane Harvey has brought us together to help our community, and the restaurant industry has really pulled through in some notable ways.”
The day after the rain stopped, Martin started to have conversations with people in the Houston restaurant industry on Facebook. They decided to gather together to feed first responders and people who were displaced from the storm. One morning they woke up and cooked breakfast for more than 300 people, working out of a restaurant whose kitchen was still in tact despite the damage done to its front of house.
“Everyone had a job,” Martin says. “Some people cooked, some people went out and delivered meals. We fed those that needed to be fed. I feel so grateful to have been part of leading this charge.”
Tiffany was the Content Marketing Manager at TouchBistro, where she shared knowledge with restaurateurs on how to run their business. She’s passionate about traveling the world and getting to know communities through great food.
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