Senate declines to advance the Relief for Restaurants and Other Hard Hit Small Business Act of 2022
As part of the American Rescue Plan, Congress approved a $28.6 billion Restaurant Revitalization Fund (RRF), which provided federal grants to eligible foodservice and drinking establishments like restaurants, bars, caterers, breweries, taprooms, and tasting rooms. The RRF is administered by the U.S. Small Business Administration (SBA). Under the RRF, restaurants and bars were eligible for economic aid equal to their pandemic-related revenue loss, with a cap of $10 million per business and $5 million per location. The funds were available for certain eligible uses, like payroll and rent. On July 5, 2021, the SBA announced that applicants had been approved to receive RRF grants in the aggregate amount of $28,574,979,472, and more than 278,000 submitted eligible applications representing over $72.2 billion in requested funds.
On July 20, 2021, House Committee on Small Business ranking member Blaine Luetkemeyer (Republican from Missouri’s District 3) introduced H.R. 4568 - Entrepreneurs Need Timely Replenishment for Eating Establishments (ENTRÉE) Act, which, if enacted, would have amended the American Rescue Plan to provide an additional $60 billion of appropriations for, and oversight of, the RRF. The ENTRÉE Act stalled in Congress and was never enacted.
On April 7, 2022, the U.S. House of Representatives voted yes (223-203) on a bill, the Relief for Restaurants and Other Hard Hit Small Business Act of 2022 (the “Relief for Restaurants Act”), that would provide $42 billion in relief to foodservice businesses that originally applied for the RRF, and an additional $13 billion to other businesses that were hit hard during the pandemic, including live event venues, gyms, and sports teams. Four Democrats opposed the Relief for Restaurants Act, while six Republicans voted for it.
On May 19, 2022, the Senate declined to advance the Relief for Restaurants Act. The bill received 52 “yes” votes, which was eight votes shy of the amount needed to begin debate on the bill. Dissenting Republicans voted against advancing the bill to the floor for debate because it would have been largely deficit funded (with only $5 billion being backed by unused pandemic relief funds).
This is likely the end of the RRF.
The franchise industry will continue to face headwinds in 2022 relating to increased commodity costs, automation and technology expenses, rising inflation, interest rate increases, wage inflation, and labor shortages.