Major Year End Newsletter!

OH, MAMA, COULD THIS REALLY BE THE END?

NOPE.

MOM AND POP RESTAURANT SURVIVAL GUIDE

Dear Clients and Friends,

By now, you have digested all of the harrowing first -person accounts from chefs and owners of how it’s impossible to make money in the restaurant business and that mom and pops are a dying American ideal and man, it’s just not a sustainable business model. None of this is breaking news because you live it every day so I won’t bother rehashing the industry anxieties but I’ll certainly validate your funky feelings. And while I can confirm that the quaint dream of a stand alone mom and pop restaurant is indeed a fading slice of Americana and that it’s quite brutal out there, there is hope if we change our business habits, band together and use our outside (or kitchen) voices for a change.

And just so we’re speaking the same language, by Mom and Pop I don’t mean Norma’s Double R Diner selling damn fine cherry pies. Save it. Today’s M’s and P’s are usually heavily seasoned hospitality veterans; a chef and a GM who have paid their dues in the front and back of tough houses or a wine rep and a musician who want to open up their dream sake bar/listening room or two cocky line cooks who think they can do it better than their berating bad-breath boss. These salt-of-the-earth Americans have saved up enough of their own money and have put their already shaky reputations on the line with their friends and family to raise enough to open their temple to Thai food in NYC.  And then, and then….. reality hits.  And it does, in fact, bite if you’re not properly prepped.

And while the historic small restaurant model may be daunting and is certainly outdated, there is room for optimism if we are open to modifying it and if we vocalize our needs. Let’s reframe the dream and figure out how to stay alive and make a living by embracing the idea that opening a restaurant is not purely an artistic endeavor and dispelling the notion that if you simply feed them they will come.

We need to use specialists and modern tools to compete as business people and we need to get in the weeds with the numbers and strategic planning.  At the same time, let’s recognize that if the industry is going to thrive, we need to unite and make our demands heard to our Dearly Elected and have them stop picking on us and maybe even lend a hand.  Please consider the following as first steps on the road to creating a better restaurant universe:

Adopt AI – use it for low risk legal (what!), bookkeeping, customer relations, PR and branding.  We know that you’re already doing this for legal because we’re honest with each other so you tell me, either sheepishly or proudly, just to let me know what’s going on out there and guess what?  I’m all for it in certain circumstances because if you can save money on legal, you should.

Restaurant owners can use AI to draft simple, minimum consequence, documents where the business terms are straightforward and the dollars are modest. Good examples include basic offer letters for staff, guest-facing policies like cancellation and credit card authorization terms, simple vendor or service agreements for things like linens or hood cleaning, and basic influencer or cross-promotion agreements. AI is great at turning the owner’s deal points into clear, consistent language that you can then tweak. But anything involving real money, reputation or if anything important at all is at stake, you would be wise to have us humanoid lawyers do it.  At HL we also believe in using AI and are finding ways to fold it into our firm to cut down on legal costs by allowing us to do more tasks on a flat fee basis or just faster and cheaper. Stay tuned for more info on that.

And you can use AI for forecasting and scheduling to cut into labor costs and for menu engineering and purchasing to improve food costs. You should start getting familiar with robotics and check out Flippy and Sally and some other cool stuff. These robots can work a fry station and maybe the grill and why the hell not?  Sure we love our cranky cooks but how many no call-no shows, harassment claims and lawsuits can you tolerate?  It all eats into our psyches and our bottom line but when Robochef is on the schedule those problems disappear. The tech is not quite there but it’s getting close so start getting familiar.

You can also use AI for overall financial hygiene. It can review your weekly cash flow and check food and beverage prices and it can also help you compete with the big hospitality groups who spend big tortellini on PR firms, branding companies and website designers. AI can help with all of that and it’s worth looking  into. Stop being afraid. Analogue is cool for vinyl but not for running a modern business.

Adopt a Growth Mentality – M and P need to have babies and keep the family growing and prosperous. Plan for success and sketch out the next few moves so you’re not walking blindly into new opportunities with some hospitality hustler. You have to build a group by expanding your concept cunningly because if you’re not growing, you’re flailing. Growth improve margins, creates opportunities for your company and for key employees and eases your risk of failure. The bigger you get, the more L’s you can withstand and the greater the chance you have for success.  Stay small forever and you’re always a busted boiler or an employee lawsuit away from ruin.

Call the Authorities! While we can do some things to improve our lot in small business life, we are all subject to the policies, statutes and laws of our city, state and federal governments and we need our Dearly Elected to start working with us and prove that they give a damn about their fictional Main Street that they’re always yapping about. There are more restaurants than any other type of business on Main Street so how about we make them pay attention to our plight and help us out?  Let’s start out with our new foodie Mayor-Elect Mamdani. But please Z, understand that NYC restaurants and their owners are not the enemy and are most certainly not the rich ones to be taxed.

Mr. New Mayor – Here’s how you can help the industry while still sticking to your principles and platform.

NYC

Still the most inhospitable city to the hospitality industry despite our (weakening) claim as the best food city in the world. It’s time to turn it around. Hire Will Guidara as a consultant or something but stop the insanity and start making us feel the love.

Health Department – adapt a fix it first model by creating a cure period for low risk issues. Have the DOH work collaboratively with restaurants to protect NYC diners rather than the scare-you-first tactics that they currently use. Do we really need a DOH inspector whipping out a badge at the host stand to announce a Saturday night inspection to keep the public safe?  Come at a normal hour, conduct your inspection, tell us what you see at the time and that you hate that we sous vide and instruct us on how to make it right and then send it to us in writing. Allow us a week or two to fix the problems and come back.  Then, if we don’t have our shit together, you can fine us.  But the nickel and diming and harassment has got to stop.

Commercial Rent Stabilization – Freeze the Rent!  Freeze the Rent! – New York City can adopt commercial rent stabilization that targets small, independent operators by guaranteeing renewal rights, setting annual increases to a transparent formula tied to inflation with a fair-return floor, and using neutral arbitration when the parties cannot agree on terms. This is not a hard price cap; it is process and predictability. Versions exist elsewhere: France limits annual rent increases for small and midsize tenants using; the United Kingdom gives business tenants statutory renewal rights with courts setting market rent when needed; Ireland bans upward-only rent reviews so rent can move both up and down with the market. Can you imagine your rent lowering!

A NYC model that blends renewal rights, moderate increases, and fair-return protections would reduce costly vacancies and turnover, shorten downtime between tenants, and create steadier cash flow for landlords while giving independent restaurants a path to survive and stay in business.

Con Ed – Navigating the nightmare that is Con Ed is a great example of why doing business in NYC is so difficult. Want gas service connected? Call six hundred times and you’ll get a vague time frame where they might come. Did you take over a space that has an outstanding bill for thousands of dollars from the the last tenant? Too bad. Pay it or we ain’t turning on the gas. It’s nuts and the we need an intervention.

Have the NYC SBS (Department of Small Business Services) create a “Con Ed Concierge”  to deal with the nightmare of calling them for new service or for anything at all. Have one point of contact that shepherds restaurants through load letters, meter requests, vault approvals, and inspections. Do the same for the FDNY and DOB. It’s not that much work and would cost very little.

Outdoor Dining – Stop the nonsense, get real and allow outdoor dining sheds all year.  Outdoor dining should be simple, clean, and reliable. The City can make that real with one application and one inspection, and a set of pre-approved modular designs that are safe, ADA friendly, and rat resistant. Let operators winterize with electric heaters and removable panels, keep fees reasonable, and use a cure first model for fixable issues. The result is better streets, steadier revenue, and a clear playbook that lets restaurants invest in outdoor space without guesswork. This an easy win.

311 Complaints -The Mayor should stop the few chronic 311 callers who treat the system like a personal cudgel by calling again and again about the same restaurant or bar. It’s too loud!  There’s people coming and going all night! There’s too much fun happening!

The code should batch duplicate complaints into a single cases and allow anonymous logging for trends but require a verified account to trigger any inspection that could lead to official visits or fines. No more midnight cop visits based on one person’s crusade. Inspectors should need actual evidence like a meter reading or their own observation, and first-time issues should get a cure period with an education visit, not a ticket.  If a single filer keeps flooding 311 with unsubstantiated complaints about the same business, warn them and then fine them for abusing the system.

ALBANY

On the State side of things, we need Governor Hochul to make our industry more of a priority and address some long overdue reforms that are needed.  She’s gonna be up for re-election so let’s get in her ear.

Change the Tip Rules

New York should let the front and back of house share tips under clear rules that protect wages and transparency. Legalize FOH–BOH tip pools with managers excluded. Give employers a short cure window for technical payroll errors, and require simple electronic records.

And be honest about today’s litigation reality: serial plaintiffs and their lawyers target technical missteps because fee shifting rules often guarantee attorney’s fees even when damages are small, so a single mistake can trigger a quick settlement. Modernizing the rules and adding notice and cure periods protect good faith operators while also keeping worker’s protected.  It’s just not controversial and 99% of restaurant owners wouldn’t dream of stealing tips so relax.

Overhaul the SLA

We’ve been told for years that things at the SLA would improve. A new philosophy was being adopted focused on “yes” instead of “no,” shorter timelines, reduced backlogs, and initiatives to help operators open sooner. It just hasn’t happened and the pace of everything is glacial.

We know the SLA staff is working hard, but the industry needs a meaningful, timely solution—something more than incremental tweaks that may show results five years from now. Waiting eight-plus months for a new liquor license is simply unsustainable. The recent loosening of rules for Temporary Permits has helped, but it’s a small relief to a much larger problem.

It may be unrealistic to expect every application to be approved immediately, but it shouldn’t be too much to ask for a modernized process, more consistent staff training, and an agency culture focused on helping operators open rather than unintentionally slowing them down.

And while we’re talking about long-promised changes, we’re still waiting on Community Board reform, updates to tied-house restrictions, and the creation of new license classes—initiatives discussed for years but still not realized.

THE FEDS

ADA and Labor – Lastly, the Feds need to help us with the ADA shakedowns and labor issues. Congress should require a notice and cure period for accessibility claims so good-faith operators can fix problems in their shops or websites before lawyers file suits for quick fees.

On labor, we need clear national rules on what counts as a tip versus a service charge, who can be in a tip pool, and what disclosures belong on menus and pay stubs. Pair that with a short cure window for technical errors and model forms any operator can adopt. The goal is access and fair pay, not gotcha lawsuits and confusion that bleed time and money from independent restaurants. Oh, and they can forgive all of our SBA and other Covid-era loans. It’s the least they can do for our culinary patriots!

ICE – the only ICE we need to see in our restaurants is behind the bar.  Stay the hell out of our restaurants.  Please.

FIGHT!– Unite sisters and brothers and friends of the hospitality industry and get off your butt and do things you haven’t done before or are intimidated by or that you think won’t help. Believe that if a council member gets 50 or 100 letters from us letting them know that we want year-round roadway dining or 311 reform or commercial rent stabilization that they will take notice. Show up at hearings and make yourself heard and they will take action. Write to the governor’s office and ask them to overhaul tip pooling and the SLA. But lamenting the state of our industry and doing nothing about it is lame and you know it. I have listed contact info below so all you have to do is write an email.

Here’s a quick email opener – you can riff:

Subject: Small business fix for [issue]: request for meeting
“We operate a neighborhood restaurant in [neighborhood]. We are seeking your help to implement a simple, business-friendly change to [issue]. Here are our concerns: May we schedule 20 minutes to review and identify the right next steps?”

Roll’Em Up – by Andrew Fine, Partner, Chair of Corporate Group

You’ve heard us talk at length about the benefits of scaling a hospitality group and taking advantage of economies of scale. In 2025, with increasing economic pressures on the hospitality industry, taking advantage of these benefits is becoming more important than ever.

Hospitality owners with multiple ventures are increasingly looking to fold their businesses into a single holding, or “parent,” company, through a process known as a “rollup.” This centralizes your companies’ ownership, operations, and profits, creating a bridge between ventures that would otherwise be disconnected from one another.

Here at HL, we’re frequently asked by clients: does a parent company structure make sense for me? While this analysis depends very much on the particular circumstances of each business, we wanted to provide some general guidance in response to this common question.

When is a parent company right for you? Here are some signs:
– You have or plan to have multiple hospitality locations under the same brand.
– You hope to execute a sale of multiple locations in the future.
– You want  to leverage multiple businesses to secure better commercial terms, for investments and loans.
Substitute personal guarantees for corporate guarantees and negotiate better bulk purchase terms with your vendors.
-You have staff that is shared between locations.

If I’m just starting out and may want to consolidate my businesses down the road, what are some things I should think about now?
– Form LLCs, not S-Corps! S-Corps cannot be easily converted into parent company subsidiaries, so LLCs are, by far, the more desirable entity type in terms of affording flexibility to restructure later.
– Negotiate your lease and loan agreements carefully! Ensure that you can execute an internal reorganization without inadvertently triggering an “assignment” in your lease or a “default” in your loan agreement. Depending on the language of these contracts, rollups may require landlord or creditor consent, which can be difficult to secure.
– Negotiate carefully with your investors! Ideally, your partnership (operating) agreements will have language allowing for the founders to effectuate a fair and equitable restructuring without requiring investor approval. Doing so gives you leverage and avoids situations where investors can hold your dreams hostage in pursuit of buyouts or favorable terms.

Want to discuss Roll-ups? email Andrew at [email protected]

Protect Your Hustle 
5 IP Tips for Hospitality Businesses by Hamutal Lieberman, Chair, Intellectual Property Group

As the year comes to a close, it’s not just about wrapping up bookings or seasonal promotions—it’s also a smart time to review your intellectual property (IP). Whether you run a boutique hotel, a restaurant group, or a growing hospitality brand, protecting what makes your business unique is key to entering the new year with confidence.
Here are five year-end IP moves to help you finish strong and set up for success in 2026:




1. Audit Your Brand Assets
Did you launch a new service, slogan, or visual identity this year? Review your
trademarks—including logos, business names, taglines, and branded experiences. If anything isn’t registered, consider filing now.

Why it matters: Trademarks help you stop copycats and build lasting brand value.

2. Protect Your Original Content
Menus, interior themes, digital content, and promotional materials are all IP. If freelancers or third parties helped create them, confirm you own the rights through signed agreements.

Check your contracts: Ensure they include work-for-hire or IP assignment clauses.

3. Secure Digital IP
Using apps, QR menus, or custom booking systems? These digital tools are IP too. Document who created them and ensure your business holds the rights.

Tip: Keep records of development timelines, contributors, and any licenses used.

4. Review Employee & Vendor Agreements

Before year-end, check contracts with employees, chefs, marketers, and vendors. Ensure there are clear clauses about IP ownership and confidentiality—especially if they’ve had access to recipes, customer data, or marketing strategies.

Reminder: Clear contracts prevent costly disputes later.

5. Think Ahead: Plan for Growth
Franchising, licensing, or expanding next year? You’ll need a solid IP foundation. Investors and partners will want to see that your assets—your brand, your content, your customer experiences—are fully protected.

Next step: Start organizing your IP portfolio now. Strong hospitality brands don’t just finish the year with great service—they finish protected. Take time now to secure your IP and enter 2026 with clarity, confidence, and a competitive edge.

Need help reviewing your IP?
Reach out to Hamutal Lieberman before Q1 kicks off. hamutal.lieberman@helbraunlevey.com

Florida Update by David and Joey Regs

HL is up and running and hustling in Miami, West Palm Beach, Orlando and Tampa.  We have been spending a lot of time in Florida as we are familiarizing ourselves with the restaurant scene throughout the state.  It’s an entirely different animal and here are some early observations:

The slow season is longer than most people expect and seems to be expanding. It can start in May and last well into November and that has caught a lot of restaurateurs by surprise. Especially those who snatched up big footprint restaurants in the halcyon Covid days. Tough to fill all of those seats when the real feel is 105 degrees.

The “Clubstaurant” vibe that defined Miami for a long time isn’t the guaranteed hit that it once was.  The market is maturing and giving way to concepts with more of a culinary focus.  Of course there will always be a place for nightlife in Miami, and pure nightlife plays are still booming, but it’s nice to see the industry moving to a more sustainable model and now putting a premium on true restaurant concepts.

Florida’s hospitality landscape, in general, is proving to be in more of a developmental phase at the moment than we originally realized.  Sure, there are established players in the game and they’re doing their respective things. But for the newcomers and the up-and-comers, tremendous opportunity abounds. Just like it is in any major city, the first pioneering operators in a new, developing neighborhood, are very likely to be rewarded for years to come. And Florida’s developing neighborhoods seem to be around every corner.

R.I.P. – Jimmy Cliff, Frank Gehry, A.M. Stern, Diane Keaton, Tom Stoppard, Ace Frehley, D’Angelo, Jane Goodall, Robert Redford, Terence Stamp, Sheila Jordan, Eddie Palmieri and Jack DeJohnette.  We listened, watched and learned from all of these inspiring people.

And of course to Donna Jean Godchaux – We love you Donna and thank you for all the years of singing your heart out with the Grateful Dead.

As Jerry and the Boys say:  Some folks would be happy just to have one dream come true

Let’s keep the dream alive and Happy Holidays!

David

P.S. You know I love your feedback- you can just reply to this email or send comments to: [email protected]

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