Northside Sun/Emmerich Newspapers

A Conversation With Fontaine On Restaurants, COVID Impact

Northside Sun

Pat Fontaine is the executive director of the Mississippi Hospitality and Restaurant Association (MHRA). He has worked for the MHRA directly and indirectly since 2004 when he began as a loss control specialist for the association’s self-insured workers’ compensation fund. He served as membership director from 2007 to 2012, and then furthered his career in insurance by becoming an independent insurance agent.

As MHRA membership and insurance services director, Fontaine worked with members on two association-endorsed insurance programs before taking on his current role. Fontaine has an extensive family history in the hospitality industry in Mississippi. His grandparents operated Allison’s Wells Resort in Way, near Canton, from the 1930s until it was destroyed by fire in 1963. Famed for hot sulfur baths and good food, it was the original home of the Mississippi Art Colony. 

Fontaine grew up on the property of the La Font Inn in Pascagoula, which his family operated from 1963 until 1999. The La Font Inn was a 191-room property, with a restaurant, lounge and banquet facilities. His knowledge of the restaurant and hospitality industries began at age 8 when he assisted with banquets and carried forward to all duties from front desk clerk to room maintenance.

Fontaine graduated from the University of South Alabama in 1990 with a bachelor’s degree in commercial banking. He also maintains his license as an independent insurance agent and is a member of the Mississippi Insurance Alliance.

Fontaine and his wife, Amanda, are the parents of three children, Wesley, Taylor and Sydney.

What is the purpose of the Mississippi Hospitality and Restaurant Association?

“Our association exists to unify, foster, promote and protect the hospitality and food service industries in Mississippi.”

When was the association established?

“It was founded in 1954.”

How many members does the association have?

“The association has about 925 members, some of which own multiple restaurant locations. That equates to about 1,200-member locations.”

How many restaurants are there in Mississippi?

“Pre-pandemic, there were about 4,800 restaurants in Mississippi.”

How have restaurants in the state fared since the pandemic started?

“Overall, restaurants in Mississippi have fared well in part to the leadership in our state. I stay in touch with the Council of State Restaurant Associations and the National Restaurant Association and we have done well. 

“The governor, the lieutenant governor and the speaker of the house considered the needs of small businesses, which include restaurants. They were responsive and reception to communications from us and keeping us informed. We have great relationships with the offices of all three leaders.”

What are some challenges restaurants face?

“First and foremost, labor is a challenge. In recent weeks, the Delta variant surge of the coronavirus is a challenge.”

How are restaurants handling the labor shortage?

“Restaurants have done all that they can to entice employees to come work for them whether through a signing bonus, a 90-day bonus and offering benefits never been offered to hourly employees of this industry such as medical insurance, retirement benefits and paid vacation. You’re seeing more offered to entice employees than you’ve seen before and it’s not enough.

“During the summer, restaurants were able to fill a lot of their labor positions with high school and college labor. That enabled them to have larger staff at that juncture. People were reporting still not enough labor but getting by and hitting decent sales levels. Now with school back in session, finding that labor is difficult right now. That’s true in all segments, including fast food, fast casual and fine dining.

“I do not have any hard figures but from conversations with members over the past couple of months, many restaurants are operating in some instances with less than 50 percent of normal staffing levels, probably less than that in the last three weeks.”

Has the federal government provided any relief for restaurants?

“Yes. There was an almost year-long effort to get a grant program for restaurants. The Restaurant Revitalization Plan came through the American Rescue Plan Act and earmarked $28.6 billion earmarked restaurants. Applications were open for the first 21 days to specialty groups like women-owned operators, minority-owned operators and veteran-owned operators. Everyone knew the $28.6 billion would go quickly. 

“In the first round of applications, we had 1,907 restaurants Mississippi apply and only 511 received funding. Those 511 restaurants received a total of $77 million.

That left $155 million requested by Mississippi restaurants that was applied for but went unfunded.

“Legislation has been introduced for an additional $60 billion for restaurants. U.S. Sens. Roger Wicker and Cindy Hyde-Smith have sought support and U.S. Reps. Trent Kelly and Michael Guest have co-sponsored similar bills. Our delegation in Mississippi has been supportive. It’s all still in deadlock.”

Why is it difficult for restaurants to secure labor?

“People are finding a way to stay at home and not work. I think that’s in part to the federally subsidized programs. Enhanced federal unemployment provisions stopped in Mississippi in June but there are other federal programs. It was announced on Aug. 17 that many recipients of the Supplemental Nutrition Assistance Program (SNAP) would see a boost in their monthly stipend beginning Oct. 1 and many households are receiving the child tax credits. When those programs start to diminish, I think you’ll see more people return to work.”

What makes operating a restaurant challenging?

“People have the perception that you’re a restaurant owner and you’re making millions of dollars. That’s just not the case. When you look at profit margins in our industry, they’re small. For the average full-service restaurant in Mississippi and nationwide, the profit margin is between 4 and 5 percent. If you include alcohol sales, you can double that because of the markup on alcohol.

“You’re trying to sell a quality product at a low price or a price the consuming public is willing to pay. Food and labor are known as prime costs and eat up a good bit of your sales dollar.  You also have building costs and utilities and all the other business-related expenses.”

How much have food costs gone up in recent months?

“Since January, the cost of proteins has increased by an average of 5 percent. 

Ground beef has gone up by 6.1 percent. Bacon has gone up by 5.1 percent and steak is up by 9.3 percent. Chicken has come down some. 

“The amounts restaurants are charging for items on their menus have increased by almost 4 percent over the last 12 months.”

What are the keys to a successful restaurant?

“It’s everything from the location of your restaurant to your concept, the build out of your space, your menu, staffing and training and attention to detail. You look at the successful owners and operators in our state and you see them present at their business. It’s careful attention to details in combination with everything else.”

Is now a good time to get into the restaurant industry?

“Right now, if you want to enter this industry, you can pick the position. Jobs are readily available. If you’re serious about a job in the restaurant industry, there’s never been a better time to get into it.”

What should people keep in mind when they eat out?

“We ask for patience and understanding from consumers. It’s going to take longer due to labor shortages. Be patient.”

How much should consumers tip when they eat out?

“People have differing opinions, but I wholeheartedly believe in tipping. Twenty percent is the customary tip. At this time, those employees who are working deserve maybe a little something extra. That’s my personal opinion.”