Foodservice Equipment & Restaurant Supply Blog

A news release issued by the National Restaurant Association today detailed efforts by the Depreciation Fairness Coalition (led by the National Restaurant Association), to urge an extension by Congress of the 15-year depreciation schedule for restaurant improvements and new construction, leasehold improvements, and retail improvements that is set to expire at the end of 2009.

The Coalition says that a seamless extension is essential to provide businesses with the certainty they need to undertake capital expenditures, which are critical to fueling economic activity and creating jobs.

History the the 15-Year Depreciation…

A provision in the American Jobs Creation Act of 2004 shortened the depreciation period for qualified improvements to leasehold and restaurant property from 39 to 15 years. The provision applied to improvements that included new HVAC systems or refrigerators, and expired December 31, 2007; the EESA reinstated the allowance for the accelerated depreciation for leasehold and restaurant improvements retroactively from January 1, 2008 until December 31, 2009.

EESA also expanded the depreciation allowance to include improvements to retail buildings and new restaurants for 2009.

Other incentives - Section 179

Also this year, Congress increased the amount that small businesses can write off for capital expenditures to $250,000. Operators can take advantage of these incentives by purchasing new equipment during the 2009 calendar year. The law also maintains the bonus depreciation of 50% for qualifying assets. This bonus is in addition to regular first-year depreciation.

• What is Section 179?
• Lease Benefits
• Savings Calculator

Sample Calculation:

Assume you finance $300,000 worth of business equipment, put it to use in 2009, and take advantage of Section 179. Your TAX SAVINGS could be significant.

1st Year Write Off:

• Section 179 $250,000
  ($250,000 is the maximum write off in 2009)
• 50% Bonus Depreciation $25,000
  (On remaining value: $300,000-$250,000=$50,000×50%=$25,000)
• Normal 1st Year Depreciation $5,000
  (Depreciation calculated at 5 years=20%; $25,000×20%=$5,000)
• Total 1st Year Deduction $280,000
  ($250,000+$25,000+$5,000=$280,000)
• Tax Savings Assuming 35% Bracket $98,000
  ($280,000x.35=$98,000)

1st Year Net Cost After Tax Savings: $202,000

Qualifying Products:

Business owners who acquire equipment including machinery, computers, and other tangible goods, usually prefer a substantial deduction in a single tax year, rather than a little at a time over a number of years. This accelerated deduction is known by its section in the tax code: a Section 179 deduction. The 2009 law extends the amount of qualified property that a business can expense under Section 179 to $250,000.This incentive is for equipment placed in service by December 31, 2009 and is designed for small companies, so the deduction phases out when a business purchases more than $800,000 in one year. (Companies cannot write off more than their taxable income).

View qualifying products. (Please contact your tax advisor to confirm the specific product you are interested in qualifies under the Section 179 prior to purchase.)

You’ve probably been reading a lot more about H1N1 lately, as the flu season approaches.

Last week, USA Today’s opinion blog featured a letter from a public health expert preaching good hygiene as the key to prevention.

And a recent Wall Street Journal blog focused on prevention guidelines for small business, including reexamination of policies on leave and telecommuting.

Also last week, the National Restaurant Association put out a great resource on H1N1 prevention. The entire presentation is available here, but here are the highlights, along with some relevant products to aid prevention…

Most importantly for restaurant operators to remember is that the flu virus is NOT spread by eating food items - it can only be spread by inhalation or by touching contaminated surfaces and THEN touching the eyes, nose or mouth.

According to the presentation, the virus is transmitted through droplets generated by sneezing, cough or speaking (within a distance of 3 - 6 feet), and also by direct contact of an infected human or by touching an object that an infected human touched or contaminated with droplets.

The virus can survive on stainless steel and plastic for 24 - 48 hours. Because a restaurant kitchen can be made up of nearly ALL stainless steel surfaces, its important to consider all measures for cleaning and sanitizing these surfaces.

Remember, all it takes is for a person to touch an infected surface, and then touch his eyes, nose or mouth to become infected.

Surfaces

Following are some general guidelines listed in the NRA presentation for surface cleaning and disinfecting.

Clean

• Organic material could protect the virus from sanitizers or disinfectants
• Removal of the organic material is a key part of control!

Rinse (if necessary)

• Some disinfectants can be inactivated by cleaners – follow the directions on the
  product label
• A disinfecting cleaner can minimize this issue

Disinfect

• Use a registered disinfectant with claims for Influenza A
• Follow directions for use on the product label

You can find a list of EPA-registered influenza virus products here.

For food contact surfaces like worktables, cutting boards and other equipment, the CDC advises restaurant operators to follow current procedures for food contact surfaces and warewashing. Reinforce the importance of thorough and frequent cleaning and sanitation with your associates.

The flu virus can survive on cloth, paper and tissues for 8 - 12 hours, and on hands for up to five minutes. Obviously, this calls for an increased frequency of disinfection and hand hygiene.

Handwashing

General prevention guidelines include the typical stuff: wash your hands frequently, avoid touching your eyes, nose and mouth, cover up when you sneeze or cough, AND following PROPER handwashing techniques - which means NOT touching the faucet after you finish washing.

There are a couple of different options for restaurants to adhere to this guideline.

Portable hand sinks are a great option for catering and other outdoor functions - especially with large gatherings of people who are eating and drinking.

The knee-operated hand sink or hand sink with optional wrist handles is a good idea for back-of-house and kitchen operations to help prevent re-contamination after hand washing.

By that same logic, touchless hand dryers and touchless paper towel dispensers can be used in customer/patron restrooms as well as BOH operations.

Next, a poster outlining the proper handwashing technique is a helpful reminder for both you and your staff.

Also, the CDC is offering a free seasonal influenza “Cover Your Cough” poster on their website, great for dining rooms and kitchens alike.

Gloves & Masks

According to the NRA presentation, disposable gloves should be used when cleaning and disinfecting. Wash hands frequently (before and after gloving) with soap and water and/or an alcohol-based hand sanitizer. Make sure you discard gloves after use.

The CDC only advises a face mask for those who have direct contact with influenza patients in healthcare settings. The WHO and the CDC have not determined any benefits of wearing face masks in non-healthcare settings.

General Guidelines

Last, here are some general prevention guidelines listed in the NRA presentation:

• Follow local public health recommendations
• Reinforce personal hygiene (hand and cough) throughout your organization
• Provide hygiene materials such as tissues and hand sanitizer stations (front and back of house)
• Stock properly applicable disinfectant products
• Closely monitor employee health
• Encourage symptomatic employees to stay home

Maybe Peter Pan had it right - maybe thinking happy thoughts is the key to rising up out of the recession.

Reports this week show that consumer mood has given stocks a boost. According to Chain Leader:

The stock market rose for the first time in a week Tuesday as unexpectedly strong data on consumer confidence sparked optimism that spending by Americans could support a hoped-for economic recovery in the second half of the year.

Citing a bunch of numerical data that means absolutely nil to me, the report went onto describe how consumer sentiment is at it’s highest since September, and investors hope resilient consumers will increase spending in time for the back-to-school season in late summer, helping manufacturers and retailers boost their depleted earnings.

Obviously, there is only so much consumer confidence can do to repair the state of the economy. But for restaurant operators, it could be a sign that banks will begin to ease up on lending as the markets rebound.

In a panel discussion at the recent NRA Show in Chicago, Bernie Siegel, founder and chairman of Siegel Financial Group and NRA Show panelist, said the key to staying afloat is to getting banks to start lending again.

He advised operators to seek financing from smaller, regional banks, as opposed to those with more than three branches.

In addition, the SBA offers a number of online courses aimed at helping small business owners obtain financing and develop a business plan. The SBA announced recently it will guarantee up to 90% of a loan submitted under several of the administration’s small business programs.

And, let’s not forget Obama’s economic stimulus package. Millions of dollars are still up for grabs in federal foodservice equipment grants for K-12 schools.

The government hopes to begin awarding the school foodservice grants beginning June 8. State deadlines to apply are approaching - in just Arkansas, Kentucky and Missouri (whose application deadlines are next week) almost $4 million in grants will be awarded. For more information and to get a state-specific application, CentralRestaurant.com