 Good morning everyone. Cheryl is the executive of the Hawaii Restaurant Association and she has a lot to do with restaurants. We also have two restaurateurs, Thomas Ray of Square Barrels and other restaurants we'll talk about, and Greg Ames of what T.S. restaurants on Maui but also on the big, big island, yeah. Okay, don't miss anything. And we are, we are going to talk about their restaurants and how their restaurants are doing as a time of COVID. Welcome to the show you guys really appreciate you being here. Thank you. Thank you for having us. Okay, so here we go. Let's talk about, let's talk about these two guys so it falls upon you Cheryl to introduce them in greater detail, go for it. Yes. First I'd like to introduce Greg Ames. He's with T.S. restaurants. He's vice president of Maui. Greg, as you know T.S. restaurants is on Maui, they're Kauai, Oahu is, you know, the ones I'm familiar with I go to Dukes, and Hula, and then I go to Maui. Hula, and then they also have restaurants in California. I'd like to introduce Thomas Ray, who is with Square Barrels and he has a new concept that he'll be opening up shortly, right Thomas? Yes, any day now, well any week now, and Kaimuki is called Heihou House, it's in Isekaiya with the craft beer and craft cocktail focus. Yes, and Thomas is the partner, and he's the co-owner of Square Barrels and that new concept. Okay, let's begin with you, Thomas, because it looks like you're older. I can't really tell from here. So, Thomas, you know, I've been in Square Barrels many, many times and I want to know, is that restaurant open now or are you open? And if you are, I want to know the challenges for you. We are open. The main challenge is reduced revenue, even though we reopened on June fit, we're not anywhere close to where we were prior to the crisis. Our lunches are down significantly because there's just no one in downtown. Our dinner is pretty good, but not anywhere close to where it was. And aside from that, creating consumer confidence and making sure people feel comfortable coming into the restaurant was a challenge initially, but with the power of social media, people have come out and said, hey, they're doing a really good job. I always feel safe there, etc. So that's been really helpful for us. Good. So what percentage of your earlier, you know, patronage do you do now? 10%, 20%, 30% what? So every day is different. There's lots of fluctuations for us currently. So on June 5, when we reopened, it was a mad dash. Everyone wanted to go out and we, and they were buying higher priced items, you know, because they just wanted that luxury feeling of being in a restaurant. But I'd say overall sales are still about about 50%, which is, you can't operate that way and survive. That's below the break, even. Yeah, definitely way below it. Later on in the show, we'll talk about how you deal with that problem. Okay, Greg, let's talk about your restaurants. So you have a few of them, some are open some are not open. Can you talk about it? Absolutely. You know, the travel to Maui has been so restricted that the guest base just isn't here. My conversations with other restaurant tours. Most are closed. Some are open. To my knowledge, only know three restaurants that feel like they're profitable at this point. And quite a few of the fellow restaurant tours I know here on the island rushed to open and now are considering closing again. We have Dukes and Waikiki is open and doing a pretty good business for the most part, although it's not at all what they're used to. We're fortunate that Dukes is such a popular place with such a great history and connection to Waikiki that they've really built themselves a good fan base. The hula grill above them is still closed and then on Kauai Kiyokis and Dukes Kauai are both open, but you know they're operating at a fraction of the volume that they were doing in the past as well. Thomas is really correct that the volumes were operating, although we're really grateful to have what we have and to be able to support our community jobs for people or being able to still contribute to charitable operations. We're really happy with that. However, from an ongoing business model, it's challenging times, Jay. Yeah. Well, we've talked to other of your cohorts earlier on the show and I get the feeling that if you have to close the second time, that really hurts. And some, and some restaurant tours have said if I've closed the second time I'm out of business I'm done. How do you feel about that? Is that a rule of thumb that you would have described? I think it's a rule of thumb. I believe our company is strong enough that we're not going to go through that. We have 44 years of culture and history and support of our community and I'm really hopeful that we're not going to go through that. However, I totally agree that that's an issue. At the time you close down a restaurant or ramp up a restaurant, the costs are pretty exorbitant. You're going to have food in a walking cooler that you're going to need to donate or use somehow. And then when you reopen there's a training process and getting everything back the way it was operating beforehand. The problem is when a restaurant stays shuttered for two or three months, the equipment that's used to being used every single day doesn't always work the way that it did when you close. So there's a lot of repair and maintenance costs that you end up dealing with. And, you know, frankly, the bills don't stop when you close the doors. Is anybody forgiving you? We've been a lot of different stages with our landlords. We have eight different locations here in Hawaii and only a few are owned by the same people. So some are being very forgiving and being accommodating and some are in a different financial position. And that's, you know, forcing their hands as well. It's a very complicated situation, especially for these small landlords that maybe are leaning on the banks to refinance in order to keep their property. So if they make concessions, then that's difficult for them. And we understand that. However, we need relief. Let's break even point. Sorry. As Thomas said, for him at Square Browse, it was around 50%. What is it for you? I suppose a difference from restaurant to restaurant. There's a difference from restaurant to restaurant. I think it's important that we realize that the industry average profitability for a restaurant is 4.5%. When you're operating at less than 5% margin, you know, and even 90% volume is difficult. Especially with the extra PPE and other things we're having to do in order to keep our restaurants safe for our guests and our employees. So we're gaining costs and we're reducing revenue. I'm not really aware that number is changes, but the margins aren't, aren't wide, Jack. Thomas, maybe I misspoke on what your break even point. What was it? Most restaurants are going to be like 70 to 90% occupancy to break even. And we have seen significant increases in our to go business, but it's not enough to sustain us for years. We have to find a way to live and work with this sickness and to make people more comfortable coming into the restaurants and realize that it's not us that's causing this huge explosion of cases. It's the huge parties at our beach parks and our parks that is causing the dramatic increase. I don't want to go on a tangent, so I'll just let you take control of this conversation. But you know, you talk about confidence, you talk about making people feel comfortable and I agree, I totally agree that is a big factor. Before my wife and I are going to amble out again. We have not ambled out and I think we're in the great majority of people who, you know, they see the numbers go up to see all these spikes going on. That does not make us more comfortable. It makes us less comfortable about everything. The question is, how do you make them comfortable, what is your magic list of comfort points and I noticed that Greg is writing all this down, you know. So my mind, how do I make people more comfortable we are doing everything that the CDC requires us to do, if not more. Obviously cases need to come down within our community for the consumer to be more comfortable and we had a golden opportunity on June 5 when we had hardly any cases, but we destroyed that ourselves. And now we're in the position that we're in as an entire state of looking at the face of another shutdown. So what do you do for the restaurant experience, a lot of masks a lot of distancing every other table what do you do what are the steps you've taken to send that message to people. So partial indoor and outdoor seating reduced seating at the bars reservation only. I mean we do accept walk-ins because we're just not filled to capacity. It's not there yet. So we, we, all of our social media posts and our email blasts and said hey please make a reservation but if you're only 20% full and not going to turn that business away because they didn't call ahead. So just for us, the consumers not there. They're not out there out more at night than they are at day but we need that day business to survive as well because that was a huge part of what made square barrels. So dynamic is we made a tremendous amount of revenue during our lunch business which acted like an insurance policy for our evening business because downtown is not a very vibrant community at night it's just pretty much us that's operating as a full service restaurant. So, have you changed your menu. Have you changed things around in the kitchen and the offerings and the pricing what we reduced our menu to make it easier to execute. So we utilize cross utilization of ingredients to kind of make it as dynamic as possible where we weren't having to order a lot of not not weird ingredients extra ingredients that we didn't need to keep in our inventory. We've always ran a very clean, healthy safe kitchen so we hadn't really changed anything in there and our front of the house is wearing masks and they wipe the menus down we have 10 menus that are that are wrapped in plastic, like, like anything you do in an office, and then we have our menu online as well so the customer can go online click on the menu and then it opens up there. Well, when you say online, is it can he order online or just just look online. Just look. Just look but I mean you can order through by squad door dash and Uber eats if you want delivery service. Are you doing delivery service are you doing pickup and delivery. Yeah, yeah, with those three carriers and then people can always call ahead to you. So you said that robust is that constant is that helping you. It's definitely a help. It's a huge help, but it's, it's not enough to survive long term. Are you at risk, Thomas, are you at risk of going out. Well, I'm a really scrappy and feisty person played a lot of rugby. I was a search and rescue swimmer in the United States Navy before I did all this restaurant stuff. I've already mentally put myself like I'm going to fight the death. If I have to change, if I have to chain myself to the front door or landlord doesn't evict us. I'm willing to do that. So I'm not going to go out of business because I just will not let that happen. You know what one question that really that really begs itself here is that in all of this crisis, you know because it's still completely a crisis. There is no question about it. Yeah, Cheryl shaking your head. Yes. Okay, you're opening a second restaurant really. All the risks that any new restaurant involves. Why are you doing that. Because I signed the lease in 2019 in July of 2019 before anyone knew what COVID-19 was. And we already sunk well over 150,000 into that well over that. You just got to keep fighting. That's that's the that's the Navy diver in you. Well, when you know when a boxer gets punched in the face in the first round he just doesn't go to the ground immediately you got you got nine or 10 more rounds left. Yeah. So what do you see as a, you know, as a scenario going forward I mean let's assume that we have more trouble, but let's assume also that somewhere along the line I don't want to sound like Donald Trump about this, but somewhere along the line things get better. And you can sort of brave the storm. What do you see in the future for square barrels and the kind of key restaurant. So it's a really difficult question because it's a lot of speculation and just so many different scenarios. I see a very positive vibrant future, if we can come to a speedy resolution of this system but you know, why are people going to go work in downtown or why are companies going to continue to lease office space when all these articles are coming out about the kind of working from home and now we've been forced to do that for five months. So I think, what is it I think first Hawaiian bank has already decided that they're going to close a lot of their office space downtown. And I could be wrong on that you know I'm hearing that second hand. I want to come back to you know one element of that the future is how how this covert experience will will reimagine would require you to reimagine your restaurant restaurants going forward I'm not asking that yet I want to talk first to great. And tracking on the same things. You know, what have you done to get by the problem of public confidence. What have you done to make these restaurants, you know, appear safe and give customers comfort to come around. Yeah, Jay, you know, sure it's appearing safe but it's but it's really being safe. And, and that's a commitment that we've taken on as a company, since we knew that this was going to be an issue. We actually have an 18 page covert 19 playbook that's been distributed to all of our restaurants, all of our employees have access to it. We take temperatures at the beginning of shifts we question our employees to see that they're not exhibiting any symptoms. We've gone to QR codes that we use on our tables so we either have single use paper menus or you have a QR code on your table that you can scan on your phone if you don't want to touch even a single use menu so you can instantly pull up and understand what's available we've limited contact with the tables it's been a big change for us where we're really used to that constant interaction with our guests that we are hoping to make our friends. And now we've had to take a little bit different approach where maybe we won't go to a table quite as much. We also have contact less payment options. So you can scan a QR code at the bottom of your receipt and pay for it on your phone versus needing to hand a credit card to someone. We have individuals that are dedicated in each restaurant to keep them clean. I saw a picture the other day of a vest that one of our individuals on a law who who buses tables, and on the back of it it said covert killer. We're taking this really, really seriously. And, you know, anything we can possibly do, not only to project that we're that we're making a safe environment but to truly make a safe environment is what we're doing. I'm really proud of the efforts our companies made it has been a challenge to reimagine. Well, I want to talk in a minute about how these things you're done may become permanently part of the firmament for your restaurant and others so Cheryl are these guys are a representative sample of what's going on in the community I mean you touch a lot of restaurants. How, how, how do they fit you know in the in the larger sample of restaurants. They totally are this exact models you have people like Thomas Ray with the individual restaurant now trying to do maybe another concept. Not everybody is as brave as Thomas. You know who will step in and and try to do a different concept. You have a lot of those restaurants right and we call them mom and pops. But like Thomas is really and truly a mom and probably a single co owner, one location type of restaurant and then you've got Greg who represents, you know, the entrepreneurial spirit where they have new whereas and they've been so successful. Greg how many years like 40 years. 40, I think we're at 44 years at this point Cheryl, we're 43 or for COVID has made me lose a little bit of track of time. I don't know if the Thomas look older, but maybe I was wrong about that. 44 years though. Actually have two different kinds of markets here today on the show. You know, Thomas Thomas is a market that I'm very familiar with. In fact, I've eaten a square barrels, many, many, many times. This is before. Okay, and that's a downtown, you know, business man's woman's restaurant and the same people come in on a regular basis. It's like a rendezvous point for for downtown or it has been a rendezvous point for downtown now it's I think it's different with Greg. I'm sure there are restaurants for tourists in large part. I'm sure there's lots of local patronage to but not when I think of Duke's I think of me, I think of tourists, and that's a real stress because there are a lot six or 700 tourists coming every day and somehow he manages to get them all to come to I don't know how he does that, but this does those are two different markets and so my question to you Cheryl's which one in general not necessarily he's got which one is doing better in the time of COVID. Oh gosh, that's a that's a tough question. You know, I would, I would have to say, gosh, guys you got to help me here I would I would have there's no, there's no doing better we're all like I've seen people, you know, like a restaurant will announce that they're closing for health reasons or whatever and then people will comment in the feed. That's great putting profits or putting health and safety over profits. There's no profits. So I'm just gonna say that right now there is no profits to be had so the restaurants that are open and haven't shut down are doing that purely for survival mode. Because if they shutter they know they will not reopen. And that's another reason why I put that in my head, we will not shutter, whether I have to chain myself to the front door to argue with landlords. We are not going to do it because I put my and I haven't been in the restaurant industry for 40 years or 30 years like I'm still stacking my chips up so everything that I have is super fragile right now. And I know you've seen my two kids run back and forth since we started this this this zoom so everything I have to do is for their lives it's not about me at this point it's literally to make sure my family is safe and has a good quality of life. And our customers are safe. Greg, let me let me ask you to have a sense of, you know, which market is better being right now, because we have very limited tourists. And on the other hand, you know, as it's clear from Thomas's experience we have very limited downtown business people that come around so which one, which one you like better right now. You know, I agree with Thomas there's there's no better both are difficult. We definitely appreciate the come on a business that that we receive. And I think he is a little bit of a misnomer out there that, you know, when you think of TS restaurants that were entirely tourist driven, we do have a large tourist component, absolutely. But we have a large come on a following as well. And we're really proud of that. Right now we're still doing doing okay business on quite well quite he hasn't been open to tourists for quite a long time. And yet people are still coming in and dining. I think on a while now. The response, the, the residents of a while who is hey let's let's head down to Waikiki where we normally, you know, have a little difficulty finding a parking space or we're getting into, let's take advantage of it. See the raw benefits. Yeah. Right. Beautiful beach right now. You know, but but here on Maui we we kind of have a different experience. So, you know, all the kind of micro markets are a little different. And we're trying to figure out how to navigate them and there's no roadmap for this day. Okay, but let me ask you my, my most, my most future rest question. And that is, how is all this going to, you know, visit permanent changes, your restaurants and for that matter the restaurant industry and why because, you know, as shell and I have talked about before. Hawaii loves restaurants local people love restaurants. We have more restaurants that come and go per capita than anywhere I've ever lived in. So it's going to come back. So what changes do you think we'll find. I don't think that the safety concerns are going to go away anytime soon. I think that there has been a long enough stretch of this if this was a two week issue. I think people would have said okay let's put it behind us but I, but I think we're at the place where we can expect that the safety and sanitation concerns are going to stick around for quite a while. I believe that this has been a time of creative destruction. And we've been forced to think about new ways to do business, whether it's contactless payment, or whether it's QR codes, whether it's enhanced takeout models, or maybe preordering. We're not exactly sure what this is going to look like on the other side, but to think that it's not going to change just isn't realistic. We're a lot of your restaurants to survive you think or will some of them have to go. I think we're all going to survive. I don't think that that is indicative of our industry. I feel like a large failure rate for the restaurant hospitality industry is going to happen. We just happened to be in the fortunate position of, I believe that that we're going to get through this okay it's just going to be a little bit of a rocky road. Thomas, how do you think your restaurant and for that matter the industry will change when we come through this. And if you don't want to answer the question, why don't you bring in your, you know, your other guests that you were just talking to and have him answer my little boy. I think I think Greg hit the nail on the head with everything you talked about the changes. I think 900 businesses I've already closed in recent projections say that there's going to be 5000 businesses that closed because of this crisis in the state of Hawaii. 1500 closed during 2008 so our leaders need to come together and make clear decisive action to prevent as much of the hemorrhaging of our economy as possible. And I want to prove all those economists and all the people who wrote those articles wrong so it's important that we support each other. Visit the local businesses as much as possible over a large chain because those chains are huge huge corporations that will survive this crisis so please support locally independent owned businesses. Yeah, one one really profound point that you touched on what I like to visit with you is that it's derivative for you. In other words, if the economy downtown is doing really well. You're going to do better because you are there, and they can see if the economy in general is in the tank and there's nobody downtown, which is the case right now. That hurts you more. So you don't you're not necessarily the master of your own fate here. You are, you know, derivative function of the economy in general. And so go ahead entrepreneurs have to be dynamic though so we'll have to figure it out one way or the other until the economy approves and proves and like I said we're not going to go out of business I won't let that happen so it's how do we think dynamically and and and jump over those hurdles that are presented. You know, I think this is a time. I'm sure Cheryl will agree with me this is a time when Hawaii, which is, this is not twice, you know, default position, but why must love businesses. We must encourage every business and every business man or woman is a hero, and we have to rebuild by encouraging them, you know, to stay the course. As you were talking about Thomas and also build new businesses, the state, the legislature, the governor, every department and every one of us, and that includes restaurants. The restaurants are in a sense is, it's easy because you can touch and feel the restaurant, you can see that business, you can, you know, be part of it. And that makes it something you can relate to. Okay anyway, Cheryl, it's time for you to close. So why don't you summarize what we've learned here today and and thank these gentlemen alright. Yes, Greg aims from Maui he jumped on and he represents TS restaurants. Thomas Ray, who jumped on and he's like he said entrepreneur spirit opening a second concept in Kaimuki on top of his square barrels. The Hawaii Restaurant Association is a resource. You're in the industry and you're not receiving our email updates, I post and the guys will tell you, sometimes I'm spamming people too much Department of Health, what the mayors are saying what the governors are saying, all the information from the National Restaurant Association, subscribe to our emails, it's free. Okay, so you guys want to mention any websites now's the time. Absolutely on TS restaurants.com easy, easy place to go so T is in Tom this is in Sally restaurants.com and that will provide you links to all of our our restaurants. I would like to really thank you Jay for having us on the show and thank you Cheryl for thinking of us to be a part of it and and getting in Jay's year to invite us. Thank you so much for the games. Thank you Thomas Ray appreciate you being here and sharing with us. And, you know, and tough to get out in a hard time. Thank you so much. Thank you Cheryl. Cheers. Thank you.