3 Ways an ERC Credit Helps Restaurants Overcome Challenges

Recovering from the challenges of the pandemic has been difficult for bars and restaurants. Meeting and overcoming these challenges becomes easier with pandemic financial aid funds, accessible through the Employee Retention Tax Credit (ERC Credit).

The ERC is a federal program that provides funds to organizations impacted by the pandemic. Regulatory and societal changes had a profound impact across the foodservice industry, and many companies are still trying to manage the lingering effects.

Your restaurant is likely entitled to ERC credits that provide support through these challenges, and ensure future growth and success.

Learn more: Does Your Business Qualify for ERC Credit?

Current issues in the restaurant industry:

• Restaurant labor shortages
• Increasing operating costs and variable costs
• Food supply chain issues
• Changing consumer behavior
• Food delivery trends
• Inefficient processes
• Managing cash flow and resources

3 Ways ERC Credits Help Restaurants Overcome Pandemic Challenges

1. Restaurant Labor Shortages

ERC credits can be channeled toward improving a restaurant’s advantage in an increasingly competitive marketplace. It can offer current employees a more competitive wage, reducing turnover. Additionally, a higher wage helps employers attract candidates from 2022’s limited supply of skilled, experienced talent.

2. Food Supply Chain Issues.

The food supply chain has experienced severe disruptions over the past months, leading to increasingly high food costs. In a recent survey, 85% of restaurants reported their profit margins were lower in 2021 than in previous years, due largely to higher food costs^[1]. ERC credits can help a restaurant bridge the gap during a period of low margins, until the supply chain stabilizes and food prices are lower.

3. Changing Consumer Behavior.

A report from McKinsey recommended specific steps restaurants should take to manage evolving customer behaviors^[2]. These included:

• Changing the design and layout of the restaurant
  • Updating the menu to reflect consumer preferences
  • Improving the digital footprint of the business
  • Automating processes for better efficiency.

These changes can be expensive, and require multiple iterations before achieving best results. ERC credits can help restaurants make adaptations now, to cope with current and future changes to customer behavior.

MP: Your Partner in ERC

At MP, we’ve helped hundreds of clients obtain millions of dollars in ERC credits. We take on the administrative burden of the ERC filing, so you can focus on your core business.

The MP process is:

Success-based: Our fee is a small percentage of the funds you receive through the program.

Risk-free: You won’t be invoiced for MP services until after you receive your credit.

Audit-protected: MP’s process ensures your submission is accurate and defensible in any future audits.

To learn more about the ERC program, download the ERC playbook: a free resource created to provide information to guide organizations through the ERC process.

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^[1] https://restaurant.org/education-and-resources/resource-library/rising-food-costs-and-supply-chain-issues-are-creating-challenges/

^[2] https://www.mckinsey.com/industries/retail/our-insights/how-restaurants-can-thrive-in-the-next-normal