Restaurants are greatly impacted by the COVID-19 crisis. Most are impacted negatively at least in the early times of Coronavirus while some restaurants unexpectedly outperform during these times. The differences are driven by factors including but not limited to types of restaurants, local competition, neighborhoods, and local restriction orders.

Business interruption and lost profits calculation only gets more complicated with the ongoing disruptions. Depending on the timing of the damage, many may find it difficult to support the projection during the loss period with sufficient and relevant financial information of a business. Changing local restrictions may require different sets of projections for different reopening phases. Restaurants located in residential and commercial areas can see contrasting store traffic with different levels of stay-at-home orders.

Due to dine-in restrictions, restaurants that are convenient and have the ability to generate good revenue from to-go/take-out orders may keep business at pre-crisis level or even outperform. Whether other local competitors remain open plays another important role. For example, a restaurant that becomes the only one open in a plaza of four restaurants can potentially see better performance than usual.

Restaurant industry is one of the most impacted industries by COVID-19. Business interruption or other lost profits situations during these times can be more challenging than usual times. A&C’s qualified and experienced professionals are here to assist businesses & insurance companies in reaching a supportable lost profit analysis. If you have questions regarding this topic, please reach out to us at (469) 467-4660, or info@ahujaclark.com.