COVID-19: Business Updates with A Dopo, Embassy Suites, Tree and Vine and Citifid-o

A Dopo Oven, A Dopo Sourdough Pizza, 516 Williams Street, Knoxville, August 2019 (Photo by Appalachian Gastroventures)
A Dopo Oven, A Dopo Sourdough Pizza, 516 Williams Street, Knoxville, August 2019 (Photo by Appalachian Gastroventures)

This is part of an ongoing series checking in with downtown businesses during the COVID-19 Pandemic. You can find the other installments of this story here: Part 1 (Sapphire, An Anonymous Business, Emilia and Knox Mason), Part 2 (Tomato Head and the West Family Businesses)

Brian Strutz with A Dopo Pizzeria

“A Dopo closed on March 17th for eight days.  We were a part of the initial wave of closures downtown.  We spent those eight days building a new business model in preparation for a longer closure.  By the time mandates were put in place, we were ready to reopen as an online ordering/curbside pickup business with a completely new style of pizza, new operations, new ordering, new menu.  In the days leading up to our closure, we had already changed many things about our service to be hyper-vigilant regarding sanitation, but even on our last night of takeout-only business, it was obvious that many changes had to happen if we wanted to make a go of this for longer than a week.

“After the initial closure on 3/17, we retained salary positions and offered every staff member the following options:

  1. Cash advances with 0% interest and up to a 3 month payback (this was all flexible and with little knowledge of how long this would last)
  2. Elective termination (or furlough) to claim unemployment benefits

“We stayed in constant communication with our staff over those 8 days, even offering a total 108 hours of detail shifts @ $15 / hour to anyone who wanted them and the restaurant got a deep clean.  After the CARES Act passed, we upgraded our offer to all 19 employees by giving them the option of staying on staff, working our takeout operation, and receiving a full payroll based on their YTD average.  Only three people continued with unemployment and the other 16 have remained on full payroll.  This was a bit of a gamble on my part, because my PPP application has not been approved yet.  It’s a risk I was willing to take.

“It’s a big fear of mine that several wonderful businesses may permanently close, but I have faith in our business model and am proud of the changes we’ve already made.  I can’t imagine how hard it would be for a larger business in this environment – like the metaphor of turning around a cruise ship vs. a ski boat.

A Dopo Pizzeria, Williams Street, Knoxville, January 2017

“Our bank (BB&T) was proactive early and reached out to us with options.  They immediately offered a very low interest, unsecured loan with all payments deferred the first year. We had options for a balloon payment or fixed amortization. They also offered to defer our commercial mortgage 90 days, and we later discovered that they were a top 6 lender in the PPP program, which we filled out an application for.   However, after a recent conversation with another restaurant owner – I learned that a payroll tax credit may be more beneficial than any kind of debt relief… so this is a pretty fluid process where information is coming in faster than any of us can keep up with.”

Asked if the current help would be enough, Brian said, “Yes, but that’s largely because we were able to reopen and start earning revenue again. Without revenue, there’s only so much that can be done for small businesses. We need revenue.

“My biggest concern is how long it takes people to feel comfortable dining out again.  If the social distancing lingers much longer than a month or two, it will eviscerate social businesses like restaurants and bars.

“I would like to extend a deep thank you to the community for the way in which they’ve supported our industry. This town seems to finally understand just how important local restaurants and bars are. That they’re willing to fight for our survival is humbling.”

Distribution of Food Boxes for Laid Off Downtown Workers, Embassy Suites, Knoxville, April 2020

Alpesh Patel with Embassy Suites

Short-term – the hotel industry (including our Embassy Suites downtown Knoxville) has been devastated, especially urban/destination properties; we’re running single digit occupancies and have had to furlough 90-95% of our team.  Hotels are huge capital investments with ongoing fixed costs, so we’re losing a lot of money each day that this continues.  While the SBA programs are somewhat helpful, they only help cover some of our expenses for a month or two.

My bigger concern is long-term; when will the vaccine become available so people will get back to doing what they used to do?  Is a % of our customer base going to have long-term fear and a reduced desire to travel and socialize once all this is over?

We try to stay as optimistic as we can and hope to be able to hire back as much of our team as quickly as possible.

Paul and Terri from the Tree and Vine at the International Biscuit Festival 2012

Terri Karlsson of Tree and Vine/Citifid-o

“On March 26 we laid off all employees for Monday through Friday and only have one employee working on Saturday at each store.  Paul and I are working both stores M – F with no pay.  We substantially reduced opening hours.  Tree and Vine is noon to 6pm and Citifid-o is 11am to 6pm.

“Both stores are considered “essential” as Tree and Vine has people food and Citifid-o has pet food and supplies.  The Tree and Vine has a significant internet e-cart following  – customers throughout the United States – a lot were introduced at our former Asheville Store – outside of the Biltmore Estate – and purchases have been about 60% of our business the last two weeks. Citifid-o does not have an e-cart.

“For both stores we have advertised curbside pick -up and delivery to certain zip codes. We haven’t made any deliveries and most folks will call ahead to Tree and Vine so we have their order ready, but still come in to pick it up. Most customers for Citifid-o are walk in.

“For the period March 25 – April 7 sales are down 50% for the Tree and Vine and about 67% for Citifid-o.  The margin is holding at the Tree and Vine.  The margin is down by 5% at Citifid-o as more of our sales are for dog and cat food rather than treats, leashes, harnesses, etc. and the margin for dog and cat food is poor.  The way the numbers wash out – we make Monday through Saturday what we used to make on Saturday.

CitiFid-o, 429 Union Ave., Knoxville, April 2016

“I applied for the “up to $10,000” grant for both stores on Thursday, April 2, and have not heard anything from the SBA on either. I have offered employees “groceries” from the Tree and Vine:  pasta, soup, sauce, etc. at no cost to them and some of them have used this.

“In addition to the above changes, both stores offer hand sanitizer, single rolls of TP (strange story) and we have a limited supply of N-95 masks from Karlsson Builders – where we buy them by the case load.  Who thought a gourmet food store would be selling TP and N-95’s?  Not me.  One department at UT hospital has taken advantage of the masks, and we have had several customers purchase them at a fair price.

“We also have a great hand-washing sink in Tree and Vine with disinfecting soap and paper towels.  Everyone who enters is invited to use it. Paul and I are trying to give support to the downtown restaurants by buying our lunch at the ones that are offering take out. We will be approaching our landlords in the next week or so for some rent relief.

“Citifid-o is in significantly more financial jeopardy than Tree and Vine.  If Citifid-o makes it, I will have one job (manager) at Citifid-o to fill.”