The Path to Survival Is Even More Complicated for Immigrant-Owned Mom-and-Pop Restaurants

May 06, 2020 Admin 0 Comments

Mom-and-pop diners and family-run takeout spots are especially vulnerable to the challenges ahead set by COVID-19

Restaurant owner Eric Sansangasakun saw the novel coronavirus coming from thousands of miles away, and even then, he still wasn’t prepared for how much damage it would bring.

Like many other Asian immigrants in the United States, Sansangasakun — who co-owns Thai and sushi restaurant Gindi Thai in Burbank, California, with his brother, his sister-in-law, and a friend from Bangkok — still has loved ones back in Asia. Since January, he had been monitoring the spread of the virus across China, Taiwan, Japan, and his home country of Thailand. He was confident that the United States would know how to address the COVID-19 crisis when it came to our shores. “By the time it gets to the U.S., it should be handled in a more structural way. We would be ready to tackle that,” he remembers thinking. “That was not the case.”

Instead, like hundreds of thousands of restaurant operators across the country, Sansangasakun and his business partners suddenly had their livelihoods upended when, one by one, cities and states shut down bars and restricted restaurants to takeout and delivery only. Virtually overnight, the industry’s already notoriously thin margins shrank to a razor’s edge, leaving independent restaurants — the mom-and-pop diners, the immigrant-owned takeout spots, the family-run neighborhood mainstays — especially vulnerable, without deep pockets and access to outside funding at the ready.

Caught between the bodily risk of coronavirus exposure on one end, and on the other, the threat of losing the culmination of a lifetime of labor and sacrifice, independent restaurant owners face an impossible choice: to close or to stay open?

I. The dilemma

Several restaurant owners describe the choice between staying open or closing as a balancing act, a constantly shifting calculus that they have to assess on a weekly or even daily basis. There are multiple considerations to juggle, including, first and foremost, health risks.

“If I could choose, I would just stay at home. That’s the safest place that reduces the risk of getting the virus,” says Sansangasakun. “But I have to strike a balance between safety and the practicality of having to run the business. You can stay home for two months, and then after that, there’s no business to go back to.”

Liz Yee, who, with her family, owns and operates the mainstay Kam Hing Coffee Shop and the newer Tonii’s Fresh Rice Noodle in Manhattan’s Chinatown, says she’s primarily concerned with the health of her parents and sister, all of whom have underlying conditions that could put them at higher risk of becoming critically ill if they contract COVID-19. Yee is aware that if any of them get the virus, “they’re not coming back from it,” so they’ve had to take extra precautions, like letting her father do all the prep work in the basement so that he doesn’t have to interact with people, and sanitizing carefully before having contact with each other.

The family has closed Kam Hing, as well as another store in Brooklyn, so that they can focus on Tonii’s without worrying about increasing the risk of exposure. But they stopped short of being able to reduce the risk entirely by closing all of their businesses. “If we gave up all three stores … we wouldn’t be able to afford to open back up anymore,” says Yee. “This one store is trying to help sustain the other ones.”

Restaurant owners also have to weigh the risks for their employees against those workers’ need to earn a living. Shahista Jiwani, whose family temporarily shuttered one of four locations of Chinese Dhaba, their Indian-Chinese fusion restaurant in the Atlanta area, says that her parents, Nadir and Mubarak — both nearing 60 themselves — worry about their staff’s health, in addition to their own. (Per Jiwani, Chinese Dhaba will continue to offer only takeout and delivery in order “to maintain the safety of our employees, as well as the general public,” even as Georgia’s Gov. Brian Kemp reopened dine-in service statewide on April 27.)

“At the same time, there are a lot of people that do live paycheck to paycheck. It’s very difficult to come to a sweet spot of [generating] revenue and [keeping] the businesses afloat, while at the same time caring for our workers’ health, but also their financial well-being,” says Jiwani. “It’s really hard to have a black-and-white answer to this.”

II. The business of staying open

There’s one black-and-white truth underlying this ever-changing equation: Even if money stops coming in, outgoing expenses do not. There’s rent, utilities, insurance, outstanding bills — not to mention all the fresh food that would go to waste if it were to go unused. So some restaurants keep their doors open, hoping to generate any measure of cash flow while adjusting to a new world ruled by takeout and delivery.

For some restaurants that previously relied heavily on dine-in income, the loss in revenue is significant. Gindi Thai — which Sansangasakun says was positioned to be slightly more upscale when it opened in 2006 — has seen a 70 percent drop in revenue over the past month, even with all the aggressive promotions and discounts put into place to attract more takeout and delivery customers. In order to make ends meet, Gindi Thai had to furlough much of its staff, although Sansangasakun says that he’s urging employees to get free meals from the restaurant if they don’t have anything to eat. “We may not have enough cash to go around at this time, but we have a lot of food.”

Ham Hung, a 35-year-old restaurant in Los Angeles’s Koreatown, has seen a similar percentage decrease. “Takeout and delivery is only like 30 percent of your income,” explains owner Sam Oh, who took over the restaurant after his father retired in 1998. Oh has lost the steady income of at least a few thousand dollars a month from catering corporate lunches for companies like Netflix because office workers are largely working from home. As a result, Oh says, he has had to cut costs elsewhere, starting with his staff. He has only kept on a couple of workers, “not because we are busy, but … so they can take something home to their families.” Still, he says, he can only afford to pay them minimum wage — without the tips they’d usually make from dine-in — on reduced hours. Most of the time, Oh is alone in the restaurant, working for 12 to 13 hours at a time.

“It kind of gets to you,” he admits. But still, he says he “never had a second doubt” about staying open. “We’ve been doing this since ’85. We went through the riots, and we went through the earthquakes. So how bad can it be, right?”

Other family-owned restaurants, meanwhile, have seen surprisingly robust sales, at least for a pandemic. With Tonii’s Fresh Rice Noodle, Yee says that orders have actually increased, between new delivery orders (the restaurant previously only offered takeout and dine-in) and the their participation in an initiative, called Welcome to Chinatown, in which donations are used to purchase and deliver meals for frontline workers at New York City’s hospitals. Tonii’s is also benefiting from being one of the few remaining businesses left open on their block, according to Yee; she says she often serves regular customers, including elderly Chinatown residents who live by themselves or can’t cook on their own.

Oriental Inn, a Chinese restaurant in Indianapolis, is also seeing good sales one month out from the end of dine-in service, in some cases even exceeding pre-pandemic revenue on busier days. According to Chris Chang — whose grandfather opened the restaurant more than 30 years ago, after immigrating to the U.S. from China with his family — this is likely because the majority of nearby restaurants have closed, driving some customers to travel 40 minutes or more for Oriental Inn’s takeout. “We are fortunate that people are getting sick of cooking at home,” says Chang.

But not everyone is so eager to patronize these restaurants, in a time when racist attacks against Asian Americans are on the rise as politicians commonly refer to COVID-19 as the “Chinese virus.” Chang has brushed off a few phone calls to the restaurant that mentioned “Wuhan bat.” In Chinatown, Yee recalls a bizarre incident in which someone tried to blockade her restaurant’s front door with a police barricade. In Burbank, Gindi Thai was broken into last week, with the thief damaging the door and taking cash from the register. As the economy worsens, Sansangasakun predicts, “there will be more crimes like this.”

III. The business of closing (and reopening)

After the mid-March shutdown, things had been going well at Suwanna Tangchitsumran’s Thai restaurant Pochana in Queens, New York. Takeout orders were up; they were able to maintain nearly the same number of staff as before; employees trusted each other to limit potential exposure to the novel coronavirus (Tangchitsumran even personally drove workers between Elmhurst, where most of them live, and the restaurant in Astoria, so that they didn’t have to commute on the subway).

But Tangchitsumran was starting to have trouble with her suppliers, according to her daughter, Natt Garunrangseewong (a journalist at Eater’s sister site The Verge). Pochana’s regular suppliers were closing or running out of supplies quickly, meaning that Tangchitsumran had to bounce from one limited supplier to the next, while also picking up and dropping off the staff, and while handling the takeout boom. “At the time, my stepdad was in Thailand for a funeral,” explains Garunrangseewong, on behalf of her mother. “So she was kind of running the show all by herself, and it was beginning to get difficult.”

At the same time, Tangchitsumran says, she noticed that the lines out the door of Elmhurst Hospital were getting longer and longer every time she drove past on her way to work. And then, on March 25, the New York Times published a report on the “apocalyptic” surge in COVID-19 cases at the hospital; two days later, news broke of the COVID-19-related death of a Thai chef in New York. This, in combination with everything else, proved to be a breaking point.

“The community back in Queens just felt very fraught and scared, and they were worried about their health,” says Garunrangseewong. Within days, they decided to shut down Pochana. Now, a month later, Pochana has newly reopened for takeout and delivery, with a pared-down menu based on which supplies the family is able to source.

IV. The aid

For restaurants facing plummeting revenue and bills that still need to be paid, the avenues for financial assistance are fairly limited. Some restaurants are seeking help from industry relief funds, although many of those funds have been overwhelmed by so many applications that they’ve stopped accepting new ones. Others, like Pochana, have sought aid directly from friends and strangers on social media, with crowdfunded donations — at least $6,000 as of April 3 — going toward employees (some of whom are undocumented or are international students, and aren’t eligible for unemployment benefits), expenses, and efforts to supply health care workers with personal protective equipment and meals. (“I want to make sure that our frontline workers are being supported, because they’re not being supported by the government,” says Tangchitsumran, translated by her daughter Garunrangseewong.)

But donations can only go so far. As many restaurant owners have stated, rent remains one of the biggest hurdles to survival, with landlords across the country offering a wide range of responses. “Particularly generous landlords might abate rent altogether or give a rent reduction, knowing they will never be repaid in full. Some landlords are choosing to simply not respond, leaving owners to figure out whether or not to pay rent,” Tove Danovich reports for Eater.

Other landlords, such as Pochana’s and Gindi Thai’s, are offering deferment plans, telling owners that they can pay them back in full later. While that momentary relief is welcome, it doesn’t completely alleviate the burden, but merely delays it. “Some landlords would expect that all the rent be paid, but for the people that run the operation, you have a big missing chunk of income, and I don’t know when you can recover that,” says Sansangasakun, emphasizing that small businesses need the understanding and the cooperation of landlords and suppliers in order to survive. “I would hope to see the landlords be willing to spare us and absorb some of the pain that we have seen, too.”

But merely hoping that individual landlords will operate in good faith isn’t enough, say Garunrangseewong and Tangchitsumran: “If there were more official regulations around how businesses and landlords are supposed to interact during this time, it would really give [restaurants] more leverage on hopefully trying to keep [their] businesses open and running.”

The government, as a whole, has not yet addressed this critical need. As Danovich reports, some states “have put a moratorium on residential evictions and encouraged landlords to allow tenants to defer rent; in most cases, this does not apply to commercial businesses.” Meanwhile, restaurant owners have found little in the federal government’s coronavirus stimulus package that can help them with rent; terms for loan forgiveness under the Paycheck Protection Program (PPP) require that the bulk of the funds be spent on labor, leaving little left over for rent. Given that a majority of restaurant’s operating costs are non-payroll, the math just doesn’t make sense.

Small, independent restaurants are also less likely to have prior lending relationships with big banks, or the scale to be able to apply for larger loan amounts — both of which, some business owners allege, major banks prioritized when processing PPP loan applications. Immigrant owners and independent operators may also lack the resources — ready access to lawyers or accountants, for example — to even know how to apply in time.

“Obviously, my parents don’t speak and read government English,” says Garunrangseewong, who helped translate and walk her parents through the application process. “I really can’t imagine how other immigrant-run businesses are doing the same thing if they don’t have kids who happen to read English well … or access to lawyers or someone who can help them navigate.”

But even after surpassing any barriers to applying in the first place, receiving funds is still not a given. The initial $349 billion earmarked for small-business loans ran out less than two weeks after applications opened, with only 9 percent of the loans going to food services (an industry that employs 14 percent of all small-business workers in the U.S.). Thanks to a rule that allowed restaurants and hotels with 500 or fewer employees per location (not per company) to apply, some of those limited funds went to large restaurant chains, like Shake Shack ($10 million), Ruth’s Chris Steak House ($20 million), Sweetgreen ($10 million), Kura Sushi ($6 million), Potbelly ($10 million), J. Alexander’s ($15 million), Fogo de Chão ($20 million), and Fiesta Restaurant Group, the owner of Taco Cabana ($10 million); amid an onslaught of criticism, many of those chains returned the millions they received in PPP loans.

The problem is not strictly that big chains are taking up all the oxygen in the room; chains, after all, are made up of smaller units, each of which employs workers who also need to make a living. The real issue is that businesses of all kinds are forced to compete against each other in the zero-sum game that Congress has created by providing inadequate funds to support everyone who has suffered in this pandemic. Those who emerge with the greatest aid, as is the case more often than not in the U.S., tend to be the supplicants with the most capital, and the relationships and influence that that capital entails. Meanwhile, smaller, independent businesses without fame or reach — more often than not, owned by women and people of color — fight for scraps. (Among the independent owners interviewed for this story, two were approved for PPP loans by late April; another received an Economic Injury Disaster Loan grant of $6,000.)

“It’s kind of crazy, because they always make money,” says Yee of the major chains that were approved for small-business loans. “They’re always around. They have a name for themselves already. For small shops like us, it’s hard. Without government help, if it dies out, you’re not gonna have it anymore.”

More funds have been made available; on April 21, the Senate approved a $484 billion relief package, which includes $310 billion to replenish the PPP — although, as Ryan Sutton writes for Eater, there still appears to be little in the new bill addressing the restaurant industry’s specific needs, among them measures that would better ensure the short- and long-term survival of an industry that is said to be “too big to fail.”

V. The legacy

While the industry writ large may be too big to fail, is there a chance that local mom-and-pop restaurants are not? Many seem to think so — as Kim Severson and David Yaffe-Bellany write for the New York Times, “large chains and well-funded restaurant groups have the resources to ride out a protracted shutdown, but the independent restaurants that make up about two-thirds of the American dining landscape — noodle shops, diners and that charming urban restaurant that always had a line out the door — may not survive.” (President Donald Trump’s prediction, by the way, is that restaurants will “all come back. It may not be the same restaurant, it may not be the same ownership, but they’ll all be back.”)

Independent, immigrant-owned restaurants have long been woven into the fabric of America dining. For decades, restaurants have served as a “vital lifeline” and source of employment for immigrants from China and other countries, proving a way for new arrivals to survive in a nation that can be hostile to immigrants and anyone perceived as foreign. “It’s for my kids,” one owner of a Chinese restaurant told Hannah Yoon, reporting for The Outline. “Their education and their future. I don’t think about mine.”

But there are other things at stake, too: family legacies, culinary lineages, serving their own communities. “If I were to get into a business … to make money, I wouldn’t be doing restaurants, trust me,” says Oh. For him, it’s as much about pride, continuing a legacy that dates back decades. “This is the typical food we’ve been selling since my father, and I want to keep on doing that as long as I still work.”

What comes after, though, is uncertain, even while Oh is confident that family-owned restaurants like Ham Hung will stick around for a while. For so many immigrant parents, the goal of working 12-hour shifts in restaurants every day is so the next generation won’t have to. “I don’t want to give them a burden,” says Oh. “I went through that so hard with my parents. I don’t want to pass that on to my kids.”

The pandemic has only highlighted the sacrifices that mom-and-pop restaurant owners have made — and continue to make — for their children. “I’m in a comfortable situation where I’m not worried about where my paycheck is coming from. And the only reason I’m in this situation is because my parents … worked so hard for my brother and I to be in a situation where we wouldn’t be affected by something like this,” says Jiwani, comparing her tech job in San Francisco to the risk and uncertainty that her parents face at their restaurants in Atlanta. “It’s twisted and ironic … they worked so hard to give us the education to bring us, professionally, to where we are today. And I’m reaping the benefits of that, and they aren’t.”

But right now, there are still sacrifices to be made, battles to be fought for the survival of independent restaurants. Sansangasakun, along with his co-owners, had to take out personal loans to cover Gindi Thai’s expenses for the month. But he says they’re not giving up yet, having already gone through what once seemed like insurmountable obstacles to open the restaurant that he likens to his “kid,” with all the work and care that he and his business partners have put into it over the years.

“We are fighters. As a group of immigrants that came here 20 years ago, when we started the business, everything was harder for immigrants to do: to navigate the bureaucracy, to get started in a new country,” he says. “We’ll continue to fight this. Whatever comes out, we will come out not regretting the decisions that we have made.”

Gary He is a photojournalist in New York City.