CHAPTER II

REVIEW OF RELATED LITERATURE

The “COVID-19”, is an airborne disease that is very dangerous and highly contagious

and is known to be caused by SARS-CoV-2 which is short for Severe Acute Respiratory

Syndrome Coronavirus 2. The fact that Covid-19 has rocked the entire world and brough it down

to a standstill is an understatement. An infected person can experience zero to severe symptoms

including: cough, loss of smell and taste, muscle pain, fever, difficulty in breathing, headache,

nasal congestion, and sore throat. While these symptoms take a few days to show from the first

day the person is infected, it takes up to two weeks for the person to get rid of them.

Unfortunately, some other victims of COVID-19 have had to deal with the impact of this

infection for a longer period to become completely cured if they are lucky. If not, they could also

be left with severe respiratory problems needing continued medical assistance. In some other

instances, patients, especially elders have not been able to beat back this disease and lost their

lives in an untimely manner.

The Philippines had its first confirmed COVID-19 case on January 30, 2020. By mid of

March of 2020, Luzon, was already in lockdown, domestic travel by land, air, and sea were

suspended, and Enhanced Community Quarantine (ECQ) was imposed by the government most

notably in the National Capital Region (NCR). By August 2020, The Philippines recorded the

greatest number of COVID-19 cases in Southeast Asia.

During the COVID-19 crises, people started panic-buying food and medical supplies

which caused major shortages and supply chain problems. In addition, events and functions of all

kinds were postponed or cancelled, educational institutions closed their campuses and switched
to online classes, and a great deal of businesses were forced to close and shut down either

temporarily or permanently. Closure of restaurants and other dine-in places also fall into this

category. About 1.1 trillion pesos was lost due mainly to cancelled flights and closures of

airports, malls, retail trade, and non-food and non-health manufacturing services.

Tacurong City is one of the business hubs of Region XII with tourism and agriculture as

the top growing industry is adversely affected by the imposed lockdowns due to COVID-19. As

such, many business sectors from entertainment, tourism, transportation, and food and beverage

businesses are forced to close which greatly affect the majority.

The COVID-19 Impact on Philippine Businesses: Entrepreneur Survey

On the study conducted by the Asian Development Bank (2020), the enhanced

community quarantine and other quarantine/lockdown measures (henceforth referred to as ECQ)

dramatically limited business activities throughout much of the Philippines. After the 16 March

2020 lockdown of the NCR, Calabarzon, and other regions, most Philippine enterprises faced the

immediate closure of business or limitation of business operations. According to the survey,

65.9% of enterprises surveyed temporarily closed their business after the ECQ came into effect

(Figure 9). Limited operations continued in 29.1% of the enterprises surveyed. Among those

with limited operations, one-fifth reported more than 50% of their business continued, while

78.4% reported less than 50% of their business operational (Figure 10). Only 4% of those

surveyed remained fully open. Meanwhile, 1.1% closed permanently.

Closed Businesses Status in the Philippines

 According to the report by the Department of Trade and Industry (DTI) Secretary Ramon

Lopez reported on July 7, 2021, that the number of enterprises that closed their operations amid

the coronavirus disease 2019 (Covid-19) pandemic went down to 10 percent in June.

Moreover, reference to the article posted in the Philippine News Agency, closed

businesses in March were only at 4.3 percent, those in partial operation at 39.3 percent, and those

in full operation at 56.4 percent. Aside from a lower number of closed businesses with easing of

restrictions, Lopez said the number of companies that reported decline in sales slowed down to

53.8 percent in June from 61.7 percent in May and 67.8 percent in March (Crismundo, 2021).

  The trade chief said the latest unemployment rate in June at 7.7 percent showed that the

impacts of the pandemic have eased as the economy reopens.

  Lopez said the movement of the NCR Plus toward general community quarantine has

reduced the estimated displaced workers to 765,454 workers from more than 1.4 million

displaced workers during the MECQ.

  “As we are reopening, we are able to bring back jobs and basically be able to reduce the

unemployment figures,” he added. (PNA.

COVID-19 IMPACT to the Philippine Employment

According to the Asian Development Bank report in 2020, in terms of employment,

66.2% of Philippine MSMEs reported temporary staff cuts, followed by Laos (53.5%), Indonesia

(51%), and Thailand (42.3%). The study also noted that the work-from-home setup is “not a

serious option for MSMEs,” with only 13% to 21% of businesses in the 4 countries adopting the

scheme. This means that small businesses adapted to the pandemic through temporary layoffs,

rather than implementing work-from-home schemes that governments have encouraged.

The Impact to Food and Beverage Manufacturing Sector

 From the study conducted by Arnesh Telukdarie 1,*, Megashnee Munsamy 1 and

Popopo Mohlala 2 (2020), on the Impact of COVID-19 on the Food and Beverages

Manufacturing Sector, he globe has been subjected to an unprecedented health challenge in the

form of COVID-19, indiscriminately impacting the global economy, global supply chains, and

nations. The resolution of this unprecedented challenge does not seem to be in the short-term

horizon but rather something the globe has to live with. Initial data provides for some insights on

responses, precautions, and sustainability protocols and processes. The Food and Beverages

Manufacturing sector in South Africa (SA) and globally is an expeditious respondent to the

COVID-19 challenge. Food is essential for human existence, but the food value chain is

subjected to significant COVID-19 risks. The Food and Beverage Sector Education and Training

Authority is responsible for skills development in the Food and Beverages (FoodBev)

Manufacturing Sector in South Africa and seeks to quantify Foodbev sustainability. This

research paper reviews global literature, performs a high-level knowledge classification, with the

aim of expedited awareness, knowledge sharing, and most importantly, quantification of an

expedited response, within the FoodBev Manufacturing sector in SA. The research is

contextualized via a SA sector-based instrument deployment and data analysis. The paper

provides insights into COVID-19 impact, adaptations, and responses in the SA Food and

Beverages Manufacturing sector.

Shenggen Fan, et, al (2020) conducted a study on “Food system resilience and COVID-

19 – Lessons from the Asian experience” which studied the impact of the COVID-19 pandemic

on the food system and has exposed the vulnerabilities of the supply chain, although the extent of

disruption varies widely, globally and in Asia. However, food systems in Asia have been proven

relatively resilient when compared with other regions. This paper considers the immediate
effects of the COVID-19 pandemic on the food system, particularly in Asia, and initial responses

of governments and global agencies to manage the crisis. A major focus of the paper is on the

outlook for food system resilience in a post-COVID-19 environment and likely long-term effects

of the pandemic. There is always a possibility of such shock events occurring in the future, hence

it seems prudent to look at lessons that may be learned from the responses to the current

pandemic.

The above related studies stress how global economy suffered from down trend of

revenue and some had really stopped from operation. The government has actually instituted

intervention efforts to mitigate the worsening impact of COVID 19 pandemic but still the effect

is hurting almost all industries especially food business.

COVID-19 has had a major impact on most food businesses. Some are thriving, some are

in lockdown and others are making significant changes to the way in which they reach customers

in order to continue trading. In almost all cases, businesses are having to adopt new ways of

working in order to manage both existing and COVID-19 related risks (B. Salmon 2020).

Food businesses must continue to adhere to their legal duties, such as an employer’s duty

to protect their employees’ health and safety and the health and safety of customers, including in

relation to food safety and hygiene regulations. At the same time, food businesses must also

abide by the government’s current restrictions. To support food businesses in their efforts to

comply with their legal requirements and adapt to the restrictions, both the Health and Safety

Executive (HSE) and the Chartered Institute of Environmental Health (CIEH) have published

separate guidance to assist with managing risk and ensuring food businesses trade safely during

this time (B. Salmon 2020).

 On a study conducted by A. Telukdarie, et al. (2020), results provide significant insights

into SA Food and Beverage Manufacturing sector alignment with current global trends on

COVID-19. The initial reliability tests indicate strong reliability of data. The data indicates a

very strong alignment to most categories of COVID-19 responses as extracted from global

literature. Essentially, SA FoodBev companies have responded in alignment to global literature

trends in most areas, with some exceptions in HR and climate change. Firstly, and most

importantly, on the issue of COVID-19’s impact, in the SA context, the analysis indicates a

significant number of companies (12 of 106) would likely close with 65% of all companies

predicting some future impact of COVID-19, aligning strongly with literature [8,36]. Companies

need to structure finances to survive, access government grants, and other government

incentives. COVID-19 has a significant impact on operation, including supply chain.

Since late 2019 early 2020, an outbreak of coronavirus disease 2019 (COVID-19) – an

infectious disease caused by a newly discovered coronavirus – has rapidly spread across the

world, devastating lives and livelihoods. As of late March 2020, the full impact of the virus on

food security and agricultural food systems is not yet known, nor will likely be known, for

months to come as the spread of the virus continues to evolve differently by continent and by

country. What is clear is that it will have, and is already having, significant negative effects

on people along the food supply chain – from producers to processors, marketers, transporters

and consumers. The Food and Agriculture Organization of the United Nations (FAO) is

particularly concerned about the potential impacts of the virus and related containment efforts

on food security and livelihoods in contexts of high vulnerability and where populations are

already experiencing food crises.

COVID-19: Current challenges facing food businesses

COVID-19 has had a major impact on most food businesses. Some are thriving, some are in

lockdown and others are making significant changes to the way in which they reach customers in

order to continue trading. In almost all cases, businesses are having to adopt new ways of

working in order to manage both existing and COVID-19 related risks.

Food businesses must continue to adhere to their legal duties, such as an employer’s duty to

protect their employees’ health and safety and the health and safety of customers, including in

relation to food safety and hygiene regulations. At the same time, food businesses must also

abide by the government’s current restrictions. To support food businesses in their efforts to

comply with their legal requirements and adapt to the restrictions, both the Health and Safety

Executive (HSE) and the Chartered Institute of Environmental Health (CIEH) have published

separate guidance to assist with managing risk and ensuring food businesses trade safely during

this time.

Food delivery and takeaway

In response to COVID-19 the government has relaxed planning rules to allow pubs and

restaurants to operate as takeaways for the next 12 months and there has been a big rise in the

number of food businesses offering food delivery and collection services as a result. Food

businesses, especially those which are offering these services for the first time, need to be aware

of all the relevant food and safety regulations and guidance.

One area of particular concern is that of allergen labelling and information. When taking food

orders over the phone, employees will need to be aware that they should ask the customer if they

have any food allergies, communicate this to the kitchen and label the meal with appropriate
allergen information. Food businesses also need to clearly indicate on their website where foods

contain one of the 14 notifiable allergens and/or notify customers that they should speak to a

member of staff about allergies and intolerances.

Food should be placed in clean, disposable containers, which are suitable for food use. To adhere

to the rules of social distancing, drivers should drop off the food on the customer’s doorstep, and

step back while the customer retrieves the food. Delivery bags should be cleaned and disinfected

at the beginning of each day and throughout the day. Employers need to ensure their drivers are

insured for business use, have a valid driver’s licence, MOT and the correct tax for the vehicle,

and that the rules on drivers’ hours are followed, which have been temporarily relaxed by the

government at this time.

For food collection services, customers should be encouraged to wash their hands on arrival, and

offered hand sanitizer. To maintain social distancing, there should be a ‘one in one out’ policy,

allocated food collection times and a specified area to pass the food to the customer. It is advised

to place a notice explaining the collection procedure at the front of house.

Hygiene

Hand washing has always been a strict standard to meet to achieve food safety compliance, and

now is the time to remind workers of the importance of regular hand washing and the essential

contribution it makes in maintaining the health and safety of food, staff and customers.

Employers must provide basins with warm running water, anti-bacterial soap and paper towels.

Drivers, by handling food, must receive an introduction into personal hygiene, health and safety,

food handling, and reporting illness and this training should be recorded. Drivers also need to

wash or sanitise their hands before and after collecting food, before and after delivering food,
and be provided with a hand sanitiser with an alcohol content of at least 60%. COVID-19 has

seen the introduction of rules requiring workers to stay 2 metres away from each other at all

times (including breaks). This may involve businesses rearranging workstations and putting

down floor markings. It is worth reminding employees that not only do workstations and

surfaces need to be cleaned and sanitised regularly, other equipment such as light switches, door

handles and taps also require a heightened hygiene process. Sanitisers must comply with BS EN

1276, as laid down by the Food Standards Agency’s guidance.

Food safety

Food businesses need to consider if an update to their food safety management systems and

procedures is required. This will be necessary if any food handling processes have changed; for

example, if a food reheating procedure has now been adopted within the business. Food

businesses will need to update both their procedures and their employees on any changes in order

to ensure they have clear evidence that food safety risks have been considered and addressed.

Employees also need to be reminded that raw and cooked foods need to be packed correctly to

avoid cross-contamination.

For delivery, the delivery bag should have the appropriate insulation to keep the food at its

required temperature, for hot food this is above 63 degrees Celsius, and for cold food, this is 8

degrees Celsius or below. To maintain the heat within the food, it is advised to keep the delivery

distance short; a maximum of a 30-minute radius for deliveries is recommended.

It is a challenging time for the food industry. Food business continuity is essential but it is also

vital to ensure that this is done safely for staff and consumers. The guidance from the HSE and
CIEH are an excellent starting point for businesses but as this is a rapidly evolving situation it is

important to ensure that they keep themselves updated on developments.

COVID-19 pandemic exposes new challenges for restaurant industry

When COVID-19 reached the U.S. and government restrictions set in -- closing indoor dining in

much of the country -- millions of restaurant workers found themselves without jobs. But now,

as restaurants are reopening and people are once again going out to eat, owners are facing a

different challenge: Their workers haven't returned.

"The thing I remember most about those early months and weeks was the word 'grief,'" said Sava

Farah, owner of The Pulpo Group, which operates three restaurants in Ann Arbor, Michigan.

"We had to lay off over 200 employees that we called family."

At the time, no one knew how long restaurants would be forced to supplant their revenue with to-

go orders and outdoor dining. For many, that was never going to cut it.

The National Restaurant Association estimates that in the first six months of the pandemic,

nearly one in six restaurants -- almost 100,000 businesses -- shut down.

Depleted industry

Things began to look up in December 2020, as the federal government gave authorization to the

first two COVID-19 vaccines. Shortly after, cases began declining, restrictions started to be lifted

and restaurants were once again able to open their doors for indoor dining.
he restaurant industry has seen some of the most notable changes caused by the COVID-19

pandemic. Dining rooms are closed to customers. Carryout and delivery are the new normal.

Some businesses have been forced to close their doors. What challenges are restaurants facing?

How can they make sure that their kitchens – and doors – stay open?

On this episode of the WorkSAFE Podcast, we’re chatting about the changes and challenges seen

in the restaurant industry. Our host, Heather Carl, is joined by Herman Styles and Ben Thies.

Styles has more than 48 years of experience in the restaurant industry. Thies has more than 30

years of industry experience. Both gentlemen work for Colton’s Steak House and Grill, and are

company partners.

Restaurants before and after COVID-19: new challenges in the industry

COVID-19 has forced many restaurant businesses – large and small – to make changes to the

way they operate. Small businesses often see the most impact. They usually don’t have a

dedicated safety professional. Without one, the responsibility for workplace safety falls to the

owner or manager.

At Colton’s, the biggest change has been several new safety measures. Employees need to follow

new safety rules all the time. It is the only way for them to be effective. This includes changing

gloves, wiping each table with a fresh towel, and wearing masks. Managers must make sure

these safety rules are followed. They also have to manage orders and staff.

Same restaurants, new risks

Restaurants are also seeing new risks walking into their doors. High-traffic surfaces present

customers and wait staff with exposure risk. “Our menus and everything that goes on the table
has to be sanitized between customers,” Styles said. “We took a lot of things off the tables – the

ketchup, the salt and pepper shakers, steak sauces.” Colton’s invested in throw-away menus.

Staff wipe any menu with plastic on it between uses.

Styles said that staff behavior is critical. Habits form over time. They are also hard to break.

Colton’s teaches safety measures. They aren’t difficult to do. For example, refilling drinks was

once a simple process. If a customer wanted a refill, then staff added the drink to their original

glass. But now, new glasses replace old ones. This prevents any cross-contamination.

Remembering each safety measure can be a challenge, though – especially during busy times.

Supply shortages

Cleanliness has always been a priority for Colton’s. However, cleaning products, soaps, and

sanitizers have been in short supply since the start of COVID-19. They are hard for the average

customer to locate. It has been even more difficult for restaurants to find what they need.

If their usual products are out of stock, then they have to find new ones. Thies says Colton’s has

had a hard time locating hand soap. They’ve chosen different items, but only after extensive

research. They also need extra masks and gloves for employees to serve customers. Both

continue to be hard to find.

Limited staff

A shortage of staff has affected nearly all of the Colton’s locations. Thies mentioned that almost

all of their restaurant locations are hiring. Some are operating at only 50% capacity, and still

have a hard time finding enough staff to work. Having enough people for each shift is a constant
struggle. And bringing in extra hands means that they are always training new hires. Some new

hires have restaurant experience – and some don’t. Training takes time. It also takes extra hands.

Better unemployment benefits are also challenging the industry. COVID-19 caused the loss of

many jobs and business closures. As a result, the government has offered assistance. Stimulus

and unemployment funds now rival the salaries of part-time restaurant workers. These funds are

available to any worker. Employees who work a lot of hours get the same amount as those who

only work a few. Some choose to collect the assistance rather than risk their personal safety to

staff local eateries.

Making adjustments: delivery and carryout

Many restaurants have added delivery and carryout to their services. Customers enjoy food from

their favorite spots. They also have limited contact with others. However, it does require extra

hands. At Colton’s, the staff meets cars in the parking lot. They must carefully pack their orders

and include any extras – like ketchup, napkins, or cutlery. If customers were inside the

restaurant, then it would be easy to provide them. But once they leave, these items are now out of

reach. Customers would either have to use their own items or go without.

Providing carryout options also increases supply costs. More single-use containers are needed.

Plastic silverware needs to be included with each order. Condiments that are usually kept in a

bottle now need to be individually packaged. Thies says that these costs affect every restaurant

business.
More risks lead to more nerves

COVID-19 worries have introduced a concerning new trend in restaurants: customers are

nervous.

When they do visit a restaurant, they often scan the room. They want to see that other patrons are

following safety guidelines, like wearing masks. Masks also prevent people from seeing one

another’s facial expressions, and some things can get lost in communication. Tensions run high.

Thies has seen arguments break out in the dining room. Everyone wants to have a safe dining

experience. However, customers don’t always agree on how to have one.

Customers also have different opinions depending on their locations. Colton’s provides masks to

anyone who doesn’t have one. Hand sanitizer is also widely available. In his travels, Thies has

seen that customers’ thoughts about safety measures depend on the state.
Making the best of a challenging situation

Restaurants continue to make changes due to COVID-19. For Thies, sanitation a priority. He also

stressed the importance of continued training. This applies to current employees and new hires.

Train them on the proper techniques to use. Styles acknowledged that more work is needed to

keep people safe. In the past, employees coming to work with a cold or cough may have been

overlooked. This isn’t acceptable. More care and attention must be paid to ensure COVID-19

isn’t spread in restaurants.

Impact of COVID-19 on the Restaurant & Hospitality Industry

The impact currently being felt by businesses in the restaurant and hospitality industries as a

result of the COVID-19 pandemic and, more directly, the rapidly expanding social distancing

requirements and travel limitations, as well as the growing number of governmental stay-

home orders, has been unprecedented in its breadth and severity. A number of publicly traded

restaurant and hospitality companies have withdrawn earnings guidance in the last week until

they have more clarity on the pandemic, and small businesses within these industries face

even greater uncertainty.

Most full-service restaurants are operating at small fractions of capacity, if not closed entirely

—either as a result of government order or as the least bad option to preserve cash in hopes of

re-opening once limitations are lifted. Those with the resources to be flexible, including ready

inventory and supply chain advantages, have rapidly shifted focus to carry-out and delivery

models, and some are even making produce baskets and butcher shop cuts available to

customers. While hotels are generally exempt from state and local closure orders, social

distancing requirements and limitations on group gatherings are keeping most guest rooms
and ballrooms empty. As a result, many hoteliers both large and small have elected to close

their doors for now.

The federal stimulus bill recently passed by the Senate, and expected to be approved by the

House and signed into law, includes dedicated relief to employees and businesses within the

restaurant and hospitality industries through expansions and modifications of existing Small

Business Administration loan programs. In addition, all businesses in the restaurant and

hospitality industries are expected to benefit from various forms of tax relief, and larger

operations may be candidates under the larger bailout loan program to be administered by the

Treasury Department. We are continuing to monitor the status of these developments and will

keep you updated as details emerge.

In the meantime, businesses within the restaurant and hospitality sectors need to make sure

they do what they can to best position themselves for a return to normal service following this

period.

Employment Issues

Employers across all industries, and especially in the restaurant and hospitality industries, are

facing extreme challenges, such as the reduced need for staffing, need for remote work,

employees without childcare, temporary location closures, and protecting employees from the

spread of COVID-19 in the workplace.

Reduced staffing needs or temporary closures

As state and local governments continue to pass orders mandating the temporary closure of

certain nonessential businesses, employers in the restaurant and hospitality industries may
find themselves with severely decreased staffing needs. Many employers are placing

employees on an unpaid furlough, which allows employees to remain on the employer’s

benefit plans depending on the terms of the plan. If not, COBRA coverage would commence.

An employer may allow an employee to use accrued PTO to pay for at least a portion of the

furlough. Subject to applicable state law, the employee may be eligible to receive

unemployment compensation for the unpaid portion of the furlough. Some employers are also

choosing to provide paid leave for a limited amount of time to assist their employees during

this difficult time.

On March 18, President Trump signed the Families First Coronavirus Response Act (FFCRA)

into law which provides limited paid leave to employees impacted by COVID-19-related

absences, as well as COVID-19-related FMLA leave. A detailed summary of the employment-

related provisions and answers to some frequently asked questions can be found in our

FFCRA alert and on-demand webinar .

Employers should also consider the WARN Act and any applicable state mini-WARN laws

that may apply in the event of a location closing, a group layoff, or a furlough lasting for an

extended period.

COVID-19 in the workplace

Many employers are understandably concerned about the spread of COVID-19 in the

workplace among those employees who are unable to perform their work from home. At this

time, deep cleaning, handwashing and social distancing in the workplace are among the

CDC’s top recommendations for employees who cannot work remotely.

Any employee who has a fever or shows any other COVID-19-related symptoms should be

sent home immediately. If an employee is diagnosed with COVID-19, the employer may (but

is not yet legally required to) inform its workforce that an employee has been diagnosed with

COVID-19 and that employees should continue to closely monitor their symptoms. Of course,

any such notice must not identify the diagnosed employee by name. Additional guidance can

be found here.

Restaurant and hospitality employers should also pay close attention to local health

department guidance on whether an employee diagnosis must be reported to the local health

department.

Financing Issues

Given the current environment of economic uncertainty, if they haven’t already, companies

should carefully review their existing financing arrangements to assess any impediments to

maximizing liquidity, if needed. Lines of credit typically include various conditions to

borrowing that must be satisfied as of the date of borrowing. Some companies may want to

draw on existing available credit proactively if they are concerned about meeting these

conditions to funding in the future. One such condition is the borrower’s certification that all

representations and warranties in the loan agreement remain true and correct, including that

no material adverse change has occurred since an earlier specified date (most commonly the

date of the most recent audit before the date of the agreement). A more detailed analysis of

material adverse change considerations can be accessed here.

Another condition of borrowing is the absence of any events of default under the agreement,

which includes compliance with any financial maintenance covenants. Companies should be
stress-testing their financial covenant models during this time and if a covenant default

appears likely, they should approach their lenders early to begin discussions about a waiver or

other relief. Lenders are likely to be inundated with such requests over the coming months, so

beginning the conversation early is advisable. Finally, if funds are needed quickly, a company

might consider borrowing at the higher “alternative base rate,” which is usually available on

the date of the borrowing request (or the following day), versus the lower “LIBOR rate,”

which usually requires three business days’ advance notice, and then converting to the LIBOR

rate.

A business located in an area with a declared emergency by the U.S. Small Business

Association (SBA) may qualify for an economic injury disaster loan  due to COVID-19 if it is

unable to meet its obligations and pay its ordinary and necessary operating expenses

and satisfies certain other SBA requirements . The pending federal stimulus bill is expected to

expand the scope of eligibility. An analysis of the SBA relief provided in the bill in its current

form as passed by the Senate as of the date of this publication can be found here.

Commercial Real Estate Issues

Certain provisions included in commercial leases involving restaurant and retail properties are

now being scrutinized in light of the COVID-19 preventative measures and mandates. For

example, many such leases contain provisions requiring continuous operations or mandatory

operating hours that may be difficult or impossible for a tenant to comply with given social

distancing recommendations and/or government-mandated closures.

Force majeure clauses are found in most leases and may excuse a tenant’s performance under

continuous operation provisions or mandatory operating hour requirements, but the

applicability and usefulness of such clauses depend on the exact language in the lease and

applicable state law. Though force majeure provisions may help a tenant avoid a lease default

for non-performance of continuous operation/mandatory operating hour provisions, most

leases will not excuse a tenant’s monetary payments even if the premises are closed by

government mandate. Commercial landlords and tenants are encouraged to be proactive in

reviewing their leases, communicating with their respective tenants and landlords, and

consulting with an attorney to determine appropriate actions in the current environment,

including the applicability of any new, COVID-19 legislation or governmental orders.

Landlords and tenants may want to consider short-term rent abatements or rent reductions;

such abated/reduced rent payments could be repaid or amortized later in the lease term or

exchanged for longer-term commitments by tenants. Landlords and tenants should

memorialize their agreements related to temporary interruptions in operations, co-tenancy

requirements and other obligations that are being rendered impossible or impractical in light

of the current circumstances. Landlords and tenants should also consider any ramifications

that the current disruptions may have on stated timelines for construction and/or tenant

allowance disbursements.

Commercial tenants in the restaurant and hospitality sectors will also want to examine what

type of business interruption insurance they may carry and the ability to claim such insurance

for reduced or closed operations due to COVID-19-related requirements. In addition,

businesses that have been required to suspend operations may be required to inform their

insurance carriers under property and liability insurance policies.

Exemptions for Essential Services

In jurisdictions impacted by governmental stay-home and mandated closure orders, businesses

in the restaurant and hospitality industry need to confirm whether they are exempted, and if

so, to what degree. With respect to impact on businesses, most state and local orders are

incorporating or relying to some degree on the categories of workers and business operations

deemed critical by the U.S. Department of Homeland Security (DHS) in its March

19 Memorandum on Identification of Essential Critical Infrastructure Workers During

COVID-19 Response, published by the Cybersecurity and Infrastructure Security Agency

(CISA), which forms part of DHS. The guidance is available here.

In the CISA list, restaurant carry-out and quick-serve food operations are considered critical,

while in-person dining is not. Most state and local orders include similar language when

exempting restaurant and food service businesses from closure orders. Hotels are not included

in the CISA list as critical businesses, but generally are exempt from state and local closure

orders to varying degrees. In all cases, these businesses are generally required to comply with

social distancing requirements to ensure the safety of their staff and guests, and to close

gathering places, such as in-hotel bars and restaurants.

Business Licensing

Even as restaurants shift from offering on-site, sit down service to a delivery based service,

they will still be considered “food establishments” under most applicable laws, including in

Tennessee, as long as they continue to employ regular, full-time employees and prepare food

outside the confines of “the principal residence of the proprietor.” They should, therefore,
continue to abide by the same regulations and standards that were observed during regular sit-

down service.

It should also be noted that several states, including Tennessee, give state officials broad

authorization to take reasonable steps to contain infectious diseases. For example, in

Tennessee, “[w]hen the commissioner” of agriculture, or any authorized representative, “has

reasonable cause to suspect possible disease transmission by an employee,” the commissioner

may take a number of actions, including, but not limited to the “immediate closing of the

facility until, in the commissioner’s opinion, no further danger of disease outbreak exists.”

Tenn. Code Ann. § 53-8-218 (3).

States also generally impose limitations on how local governments can regulate food service

establishments. For example, in Tennessee, while state law authorizes local governments to

“regulat[e] zoning, building codes, locations, hours of operation, or the issuance of permits,”

state law mandates that the state is “the exclusive regulator of food and drink sellers, vendors,

vending machine operators, food establishments, and food service establishments in this

state.” See  Tenn. Code Ann. § 53-8-223. At first blush, this may seem to be in tension with

the actions of certain Tennessee local governments, including Nashville’s Safer at Home

Order. Nonetheless, such orders are valid under certain state’s laws, assuming the state gives

local governments “the power and authority to . . . provide for the health and safety of persons

and property” in times of public emergencies. Tenn. Code Ann. § 58-2-110(3)(A).

As developments related to COVID-19 continue to unfold, our attorneys are keeping a close

eye on updates from multiple government agencies that directly affect the restaurant and

hospitality industry.
COVID-19: Impact on food & beverage consumer products companies

Consumer Products food & beverage companies are facing significantly reduced consumption as

well as disrupted supply chains. At-home consumption has increased, but out-of-home

consumption – which historically generates the highest margin – has come to nearly a standstill.

There may be long-term changes in customer behavior and demand.

How restaurants can better assist customers during times of uncertainty

Restaurants are the heart of many communities. It’s where couples enjoy date night, families

celebrate taco Tuesday, and teams gather for postgame grub. But as the world grapples with

how to respond to COVID-19, both national chains and independently owned restaurants are

quickly strategizing to find new ways to serve their communities.

While I manage the Restaurant teams at Google as my “day job,” I am also a restaurant owner

who is personally experiencing this crisis from the front lines. My wife and I opened  Seven

Scoops & Sips in 2019, and we donate a portion of our earnings to worthy causes. (Seven

Scoops has been able to donate over $60,000 in the past nine months because of community

support.) Before COVID-19, the store was packed every night because people knew that their

purchase of an ice cream, coffee, or acai bowl was helping to fund local schools and sports

programs, cancer victims, homeless youth, children in need in Harlem, villages in Kenya, and

other local and global causes. The sting of this crisis is especially hard since now all funding is

put on hold until business can resume.

The pandemic presents unique challenges for Seven Scoops and the industry. And while the

path forward depends on many variables, here are some strategies restaurants are adopting to

support their customers in this unprecedented moment.

Help your customers plan and prepare

When uncertainty is top of mind, people are looking for information they can trust. This is

even more evident when it comes to accessible and available food options nearby. “Take out”

search interest has increased 285% since the start of March. 1 Being there to help people

navigate this new normal with up-to-date and relevant information can make all the difference.

Proactively communicating changes that affect your restaurant across customer-facing channels

is crucial.

Proactively communicating changes that affect your restaurant across customer-facing

channels is crucial in helping people plan and prepare. Updating your Business Profile  on

Google is one way to do this. Updates you make on your profile about your location, such as

changes in your restaurant hours, including temporary closings or modified hours, will also

appear on Google Search and Google Maps. And, at a time when people are assessing what

best fits their needs, providing information, like whether you’re offering takeout or delivery, is

a way you can help users decide what’s right for them.

Communicate takeout or delivery solutions effectively

For the last five years, “restaurants near me” consistently ranked as the most popular “near me”

search.2 But consumer behavior has changed. The focus has shifted to alternative mealtime
solutions. We’re seeing more consumer interest related to “delivery” in the last three weeks as

a result of national guidance to shelter in place; search interest for “food delivery” related

queries has spiked 100%. 3

Reassure strict restaurant safety and sanitation measures

Today, more than ever, when choosing where and what to eat, safety is paramount. In fact,

search interest for “is food delivery safe” has increased 650% across the U.S. since the

beginning of March.4 Reassuring customers that you understand the concerns for safety and are

taking important steps to address the current situation is key.

Covid-19: How is the Foodservice Industry Coping?

The world’s latest crisis - COVID-19 - has taken over our lives, irreversibly shifting our

economy, society and lifestyle. But how has it affected the foodservice industry – and what big

changes are on the horizon? Find out more about how coronavirus has impacted our industry and

what foodservice operators should consider when adapting their business to life as our ‘new

normal’.

How is the industry changing?

Though the pandemic is still in its early stages, we’ve already seen a considerable shift in how

consumers are getting their food, and how local restaurants and foodservice providers are

responding.
Local farm shops are booming

One of the biggest shifts has been that of consumers turning to local farms for their fruit,

vegetables, meat and dairy produce. While grocery stores have experienced severe shortages in

supply, farms shops have been able to offer local shoppers a steady stream of fresh goods.

Many local farms now also offer quick-turnaround delivery or contactless collection (with

impressively short lead times), which has been a key advantage for those who are at-risk or

quarantined at home. Grocery stores, on the other hand, have been unable to keep up with

demand, leaving many without a suitable delivery option for weeks, if at all.

Another big advantage of local produce is that people know where their food is coming from,

which not only helps them feel more secure about avoiding shortages from hard-hit countries,

but also helps them contribute to the local economy, supporting local businesses that otherwise

might not have been able to ride out the storm.

Coping with COVID-19: A Pandemic Strategy for Your Small Business

So, this is our new Covid-19 reality. Many COSE businesses are temporarily surviving with

some or all the staff working from home. Some are closed with dim prospects for ever

reopening. 

Some businesses are even flourishing—those whose products or services are in greater demand

now than they were in February, like florists, take-out-only food shops, commercial cleaning

firms and liquor stores.  

The rest of us hunker down and wait for this crisis to pass so we can get back to as much normal

as we’ll ever see again. 

While the scope and severity of this pandemic caught most of us by surprise, the next one better

not. So, create a crisis plan for dealing with the next one and surviving it. Here are six potential

components of that plan:

Crisis planning component no. 1: Have a solid understanding of your business insurance.

While many business interruption policies exclude pandemics, some might. It’s important to

check with your provider. Determine if more and/or better insurance coverage is available and

makes sense to protect your business.

Crisis planning component no. 2: Develop a detailed process for converting parts or all of

your operations to staff working from home. This won’t work for most manufacturers unless

they are producing essential products, but parts of the business might be able to function

remotely. And create safe social distancing for those people still working on site.

Crisis planning component no. 3: Consider your current staff. If you anticipate losing some

people who won’t be available when the crisis is passed, start thinking about where you would

look for replacements. If you have a file of unsolicited but worthy resumes, reach out to those

people to see how they’re doing … just in case. Even consider scanning the primary job boards

to see who is out there.

Crisis planning component no. 4: Reinvent your business. Determine if your company can
switch gears and produce medical supplies needed to battle a future pandemic. If so, create a

process for that conversion.

Crisis planning component no. 5: Create a crisis communication plan for reaching out to

your customers. Since the COVID-19 pandemic has only been affecting what we do for less

than two months, it’s not too late to check in with them if you haven’t already done so. Ask how

they’re doing and what they’re doing differently.

Crisis planning component no. 6: Continue to check in. If your business still provides some

products or services, let customers know what you can do for them and follow up with an email.

If you had to stop completely, indicate when you think you might be open again, even if it’s a big

guess. If you’ve identified sources of relief or resources, share that information. Depending on

what you discussed, plan to check back in with them periodically during the quarantine period.  

Restaurants come up with creative ways of coping with COVID-19

As the world is overcoming COVID-19, many countries are now opening their shops, restaurants

and other entertainment venues to revive their economy.

Restaurants are now coming up with new and innovative ways of giving their customers a unique

dining experience, while making sure that all guidelines of social distancing are maintained.

Mannequins to the rescue

Mannequins have been placed at tables in a bar in Austria to help customers maintain social

distance. Austria, recently, reopened all cafe and restaurants.

Waiters don face shields

A waiter wears a face shield as he serves customers at the Cafe Prueckel in Vienna. All

customers have also been advised to wear masks.

Intimate cocoons

A Dutch restaurant called Mediamatic ETEN has come up with an idea on how to offer classy

outdoor dining in the age of coronavirus: small glass cabins built for two or three people,

creating intimate cocoons on a public patio.

Through the glass partitions

Spanish restaurants and cafes have installed glass partitions on the table to help the diners

converse while maintaining safe distance.

Masks and gloves are now compuslory

Customers can get their take away meal at the restaurant of French chef Christopher Coutanceau,

where wearing masks and gloves is compulsory. 

Eating through plastic partitions

People eat in between plastic partitions, set up in an effort to contain any spread of the COVID-

19 coronavirus, at Penguin Eat Shabu hotpot restaurant in Bangkok 

Covid-19: How is the Foodservice Industry Coping?

Restaurants are shifting to take-away or delivery models

It’s no secret that the foodservice industry –and hospitality industry as a whole – has been

heavily impacted by the containment measures imposed by governments. But many restaurateurs

have been quick to adapt their business model to offer their customers more flexible, pandemic-

friendly dining options. This has caused a surge in take-away and delivery service options, not

only from quick service or fast-casual restaurants but also from higher-end restaurants.

While the commission fees of delivery service providers (which typically reach as high as 30%)

can be off-putting for many restaurateurs, there’s good news on the horizon. Many delivery

services are adapting their business models by reducing or eliminating their fees or opting for a

flat-rate, subscription option so restaurants can get a better return on their margins.

But what about food safety concerns? Most restaurants have implemented stringent health &

safety regulations to protect both their staff and their patrons – covering everything from

sourcing, to preparation and service. In China, foodservice operators like McDonald’s have

responded with contactless pick-up options where customers don’t have to make any contact

with the staff.

Independent businesses are seizing the day

As many international chains such as McDonald’s, Subway, KFC and Burger King have decided

to close stores altogether, there’s a growing opportunity for small, independent businesses to fill

the gap. These businesses are more agile and flexible as they employ fewer staff (often from the

same family), and are therefore able to react quicker to serve local customers. These customers
are likely to spread the word throughout their local ommunities, further boosting the success of

these businesses and building a loyal customer base that’s likely to stick around well after the

dust has settled.

Food & workforce safety tips

Food and workforce safety will remain a key issue during – and beyond – the ongoing pandemic.

While the good news is that there is no proof of COVID-19 transmission from food or food

packaging, restaurants will still have to put in place stringent new safety measures to protect their

staff and customers alike.

Here are the key factors that any foodservice business should consider.

 Consult with your local health department for protocols and guidance on what measures

are required to keep your business running smoothly. Depending on the amount of

community spreading of COVID-19 within a particular area, these recommendations may

vary.

 Set up clear protocols for your establishment and communicate these to all of your

partners, suppliers, employees and customers.

 Workers presenting symptoms of COVID-19 should not be present at work, or in contact

with customers or coworkers, and should immediately communicate their condition to

their employer.

 Employees handling food should wash their hands for at least 20 seconds and wear

gloves, a mask and/or hairnet as recommended.

  Employees should stay at least 2 meters away from customers and coworkers, to comply

with social distancing recommendations. This could involve:

o Limiting the number of staff in a food preparation area and spacing out

workstations.

o Limiting the number of people who can come into the premises at one time (rule

of thumb = 1 person/10m2) by using a ticketing system.

o Using spacing measures (tape/line floor markers) to help with distancing and

show customers where to navigate.

 While ‘open food’ areas such as buffets do not pose an increased risk, customers and

employees should continue to behave in a hygienic manner. Where possible, food should

be pre-packaged.

 Hand sanitizer should be made available to customers, and its use encouraged upon

entering and leaving the establishment.

 Touchpoints (doors, payment stations, baskets, handles, ladles etc.) should be cleaned and

disinfected regularly.

For restaurants offering a delivery service:

 Delivery staff should be well-trained and adhere to public health advice regarding the

collection and delivery of orders.

 Drivers should wear clean (and when necessary, protective) clothing, and sanitize their

hands before and after every transaction.

 Delivery vehicles should be kept clean, in good condition and free from sources of

contamination. They should be disinfected regularly.

 Where possible, ‘contactless delivery’ options should be offered - where food can be left

at the front door or on the porch.

 You may want to consider limiting the range of menu items on offer to simplify the

production process and streamline your operation.

 Food temperatures must be carefully regulated and maintained:

o Refrigerated food must be kept below 5°C.

o Hot food must be kept about 63°C.

o Frozen food must be kept at -18°C.

 Food packaging should be controlled, to make sure that it is suitable for different food

types (some packaging is not suitable for hot food).