Steve Coravos, who has owned and operated Mama’s Italian Restaurant in Dracut with his cousin Charlie for 31 years, says the minimum wage increase to $15 an hour by 2023 will be “devastating” to his restaurant and many others, increasing his labor cost to 40 percent.
While he knows the wage is not going to be rolled back now, Coravos said the state should consider ways to lessen the burden on small businesses through tax breaks, credits, or other efforts.
“Since 2008 I have increased prices four times to offset operating and labor costs,” Coravos said. “We cannot keep doing that; the only other options are to stop opening for lunch or close all together.”
On the other end of the spectrum, Eric Faulkner, owner of Warp & Weft in downtown Lowell, welcomes the minimum wage increase.
“I do not think the increase is a problem,” he said. “If more people can afford to eat out, we will have more customers.”
Faulkner is adding to his business portfolio this spring, opening a second restaurant, this one an Italian eatery, in the space next door to W&W. It will utilize the same kitchen space.
However, Mama’s and Warp & Weft are very different businesses with Mama’s employing 62 workers and W&W having a staff of 15. Mama’s is more of a family dining establishment, while W&W offers live music with 60 percent of their sales coming from alcohol.
There is no one-size fits all solution to the variety of issues facing Massachusetts restaurant owners; they are as diverse as the size and types of establishments they run.
Tuesday morning the Massachusetts Restaurant Promotion Commission heard testimony from a dozen Merrimack Valley restaurant owners and economic development professionals at the Nancy and Richard Donahue Family Academic Arts Building at Middlesex Community College.
The Commission, created during the state budget process last summer, is chaired by Massachusetts Office of Travel and Tourism Executive Director Keiko Orrall and made up of legislators and industry leaders.
Sen. Ed Kennedy (D-Lowell) sits on the Commission as Senate Chair of the Joint Committee on Tourism, Arts, and Cultural Development.
Their objectives are to examine: challenges to maintaining and operating restaurants, including issues related to the training, development and retention of the industry’s workforce; barriers to establishing new restaurants; licensing and permitting issues impacting emerging business models; strategies for increased marketing to attract visitors to the commonwealth’s restaurants; strategies for cross-promotional partnerships, including partnerships with the hospitality, agriculture and seafood industries; and examining successful programs and national and local best practices.
A series of regional meetings are being held throughout the Commonwealth, with a March 16 deadline to report to the Legislature.
“Restaurants are a complicated business,” said Larry Andrews, President and CEO of Massachusetts Growth Capital Corporation (www.empoweringsmallbusiness.org), a quasi-state agency that provides technical assistance, resources and funding for businesses unable to receive funding from traditional lenders. “Ongoing financial management is a better predictor of viability than initial capital.”
Better ongoing education for business owners, as well as access to a reliable, educated workforce were issues that came up frequently during the discussion.
Mary Guerrero, who has owned and operated Café Azteca and El Taller in Lawrence for 26 and 8 years respectively with her husband Antonio said she still struggles with keeping the restaurants’ finances.
“I still don’t know what I am doing,” she said, adding she does not have the time to go back to college and would like to have some affordable accounting education or a mentor who can come to the restaurant to help her understand how to better handle the finances.
Faulkner said his biggest challenge is finding and retaining good employees.
“Finding people who don’t have some sort of drug or alcohol addiction is practically impossible,” he said, a sentiment echoed by Tom Swerchesky, who owns the Fireside Restaurant in Methuen and has been in the business s for more than 50 years.
Swerchesky said he would like to be able to connect better with vocational schools and other culinary education programs to recruit kitchen staff because “ when I post a job, what I am getting is trash.”
A group of students from Middlesex Community College’s Hospitality and Culinary Arts Program attended the meeting, as did the program’s coordinator Kim Morrissey and Dean Judy Hogan who said they could connect with business owners regarding a variety of ways MCC resources could assist them in both ongoing education and employee recruitment.
Additionally, he said the other big problem his business faces is what he said is too much government regulation.
“The government is regulating us to death,” Swerchesky said, pointing to required classes in CPR, allergy awareness, choking, as well as ServSafe and TIPS certification, on top of being required to provide paid medical leave, sick time, parental leave, workers’ compensation and unemployment insurance.
“I’m at a point where I am ready to give up this racket because of the regulation,” he said.
Lisa Bebo, owner of Tavern on Merrimack in Lawrence and Marybeth Shanahan, owner of the Dream Diner in Tyngsboro, spoke of the challenges of owning restaurants in communities bordering New Hampshire.
Bebo said the state’s antiquated liquor laws, which outlaw “happy hour” incentives and do not allow establishments to serve alcohol until noon are hampering her ability to compete with restaurants in nearby Salem, New Hampshire.
Shanahan said Massachusetts needs to start better prioritizing and supporting its own restaurants before those in neighboring states.
When she opened the Dream Diner in 1997, Shanahan tried to get it listed on the sign along Route 3 headed into Tyngsboro, but there was no space left on the sign. She had to wait several years, until the KFC up the street closed to get a spot and even then, she had to fight for it. Every other restaurant on the sign was located in New Hampshire.
The Massachusetts Restaurant Promotion Commission is interested in collecting more feedback regarding the state of the restaurant industry in the Commonwealth from restaurant owners, as well as employees and customers. To leave a comment or complete the employee or customer survey please visit https://www.massvacation.com/restaurant-promotion-commission
