Proposed legislation would provide an additional $60B to the Restaurant Revitalization Fund grant program

August 2, 2021

Blog Post

As part of the American Rescue Plan, Congress approved a $28.6 billion Restaurant Revitalization Fund (RRF), which provided federal grants to eligible foodservice and drinking establishments like restaurants, bars, caterers, breweries, taprooms, and tasting rooms. The RRF is administered by the U.S. Small Business Administration (SBA). Under the RFF, restaurants and bars were eligible for economic aid equal to their pandemic-related revenue loss, with a cap of $10 million per business and $5 million per location. The funds were available for certain eligible uses, like payroll and rent. On July 5, 2021, the SBA announced that applicants had been approved to receive RFF grants in the aggregate amount of $28,574,979,472, and more than 278,000 submitted eligible applications representing over $72.2 billion in requested funds.

On July 20, 2021, House Committee on Small Business ranking member Blaine Luetkemeyer (Republican from Missouri’s District 3) introduced H.R. 4568 - Entrepreneurs Need Timely Replenishment for Eating Establishments (ENTRÉE) Act, which, if enacted, will amend the American Rescue Plan to provide additional appropriations for, and oversight of, the RFF.

The ENTRÉE Act will:

Provide $60 billion to the RFF paid for by rescinding money from unspent Economic Injury Disaster Loans (EIDL) and state and local funds within the American Rescue Plan.
Increase oversight responsibilities and audit requirements for the SBA to prevent waste, fraud, and abuse.
Eliminate preferential treatment in the RFF for women, veterans, and socially and economically disadvantaged applicants, which led to the commencement of various lawsuits.
Require all applications to be received, reviewed, processed, and disbursed on a first come, first served basis.

The ENTRÉE Act is in the first stage of the legislative process. It will be considered by committee before it is possibly sent on to the House or Senate for consideration.

This decision only adds to to the growing circuit split on the application of the “hypothetical test” or the “actual test” in bankruptcy, and may lead a higher court to consider the issue. For franchisees in the Sixth Circuit who desire to reorganize in bankruptcy, however, this decision provides clarity about which test parties may use to determine if a contract could be assumed.

This ruling reveals the limits to the rejection power of the Bankruptcy Code. While a bankrupt franchisee can use bankruptcy to unburden itself of future monetary liabilities due to a franchisor, such franchisee cannot completely rid itself of those bargained-for equitable remedies that are there to protect the integrity of the brand and the confidential, proprietary information that the franchise arrangement is designed to protect.

Proposed legislation would provide an additional $60B to the Restaurant Revitalization Fund grant program

The ENTRÉE Act will:

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