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Kevin Boehm: PPP Repayment Terms a “Death Sentence”

The Boka Restaurant Group cofounder on pivoting to carryout and why he’s not taking out federal loans

Boka Restaurant Group cofounders Rob Katz and Kevin Boehm  
Photo: John J. Kim / Chicago Tribune

When restaurants shut down in mid-March, Kevin Boehm and Rob Katz, co-CEOs and cofounders of Boka Restaurant Group, made the difficult decision to completely close all 23 of their restaurants, furloughing the 1,800 workers employed at restaurants like Somerset, Bellemore, and Cold Storage. The shutdown was especially agonizing for Boehm, whose mother died of pancreatic cancer the day before he closed his restaurants.

Now, after nearly two months, Boehm and Katz are trying something new: On May 1, Boka reopened for carryout, and other locations have slowly followed suit. Girl & the Goat is offering meal kits and grocery items; Momotaro and Swift & Sons Tavern are both open for takeout, with the latter also offering meal kits.

Boehm explains why now was the right time to offer takeout, why the Paycheck Protection Program isn’t the answer for restaurants, and what the government needs to do to give restaurants a fighting chance.

Why did you decide to bring back some Boka Group restaurants for takeout?

We were incredibly deliberate about jumping back into the takeout game because of all the unknowns. For Rob and I, making fast decisions when the stakes are so high is very difficult, so once we felt like we could build models that were based on success and safety, we thought we could move forward. The chefs wanting to do it were a big part of the equation — several of them approached us wanting to reopen for takeout.

It seems like a lot of other restaurants have decided to return right around now as well: Elske, Pacific Standard Time, and Monteverde have all reopened in the past couple weeks. Did something change?

I think there are a variety of reasons. There are restaurants that need to do takeout in order to survive and feed their families, there are people that wanted to make sure that others could operate takeout safely before they entered the market, and there are people who just want to get back to work.

Are there plans to bring back any other Boka spots while we’re shut down?

We are going to start rolling out other takeout models. We are approaching them like new openings and trying build a critical path for each that both allow us to do amazing food and provide safe, seamless experiences. We are working with our other chef-partners on re-opening with delivery that makes sense.

It’s also providing a platform for them to try new ideas or concepts. For example, Giuseppe Tentori will be making Italian food for the first time ever and doing a GT Italian takeout popup.

What do you envision reopening your restaurants looks like?

It will be a whole new world, and it will be like opening a brand new place. Unlike most businesses that can just turn their lights on when the pandemic is over, restaurants fundamentally have much bigger problems. We don’t have the luxury of telling even a portion of our staff to telecommute.

Plus, there will be all new expenses: re-training of employees on new protocols, gloves, masks, plexiglass, laminated menus, and bottles of sanitizer. And guess what? Our inventory was perishable, so we have to completely start over in the kitchen. Traditional retail at least still has their inventory. It will be tough sledding. We will be operating at probably half normal sales levels, but our rents will be the same, doubling our occupancy expenses in a model that was already thin.

Have you been able to get any government funds? What’s that experience been like?

The experience for everyone has been a disaster. I speak to 30 or 40 operators a day who are in various stages of confusion, hopelessness, and sadness. There are so many people looking for a lifeboat right now and the current loans are not it.

The Paycheck Protection Program (PPP) has been characterized as this savior, but it’s decidedly not for restaurants. You can ask any member of Congress: It was written as a fix to a two- or three-week problem and doesn’t understand the complexities of restaurants. If we could have opened fully in the middle of April, PPP could be amazing. However, that is not the reality.

The PPP is a loan that is only forgiven if you are able to bring back all of your employees during an eight-week period, starting on the day you are funded. Restaurants can’t bring back all of their employees because they’re not allowed to open fully. That’s coupled with the fact that many employees don’t want to come back out of safety concerns, and rightfully so. It becomes an albatross around restaurants’ necks: We have to start paying it back as a loan in six months, termed out in two years. That is a death sentence.

We are not currently using any PPP loans on our restaurants for that very reason. Despite having a massive hole right now, we are trying to fill that in with takeout models without using any governmental funds.

You’re involved with the Independent Restaurant Coalition (IRC). Say more about the IRC’s lobbying efforts over the past several weeks.

The IRC mobilized very quickly. Originally conceptualized by [New York restaurateur] Will Guidara and a few others, Rob and I joined in those first few days, along with [One Off Hospitality partner] Donnie Madia.

The idea was simply that we needed a unified voice for independent restaurants in Washington. We raised money, hired an executive director, hired lobbyists from Thorn Run Partners, and had meetings every morning and every evening, diligently trying to effect policy in Washington. We have held webinars on PPP, developed strategy, created videos, written policy, and tirelessly spoken to congressmen. We just got done putting together the framework for a stabilization fund.

A dedicated restaurant recovery fund is critical to the recovery and survival of independent restaurants. We’re proposing a $120 billion fund only accessible to companies that are private and have fewer than 20 places of any one brand. 

What does the government need to do to ensure that as many restaurants as possible can reopen?

There needs to be a stabilization fund for independent restaurants that are grants and not loans. The other thing is extending the origination date of PPP, initiated by the borrower, to any time between now and August 30.

Is there a timeline you can foresee for when we can expect onsite dining to resume?

Anything I would say would be conjecture, but I’m hopeful. In my mind, I see mid-June. I think Rob is more like July 1.

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