What changes customers should expect when restaurants reopen: Velvet Taco CEO

More states are beginning to reopen non-essential businesses across the country. Velvet Taco CEO Clay Dover joins Yahoo Finance’s On The Move to discuss how his company is faring during the coronavirus crisis and his plan for reopening.

Video Transcript

JULIE HYMAN: You're watching "Yahoo Finance Live." I'm Julie Hyman. Well, unfortunately, we're having this conversation on Seis de Mayo and not Cinco de Mayo. We're going to bring in Clay Dover. He is the Velvet Taco CEO.

Clay, you have 14 restaurants stretching across four states, and you're joining us from Dallas, Texas. And in fact, you have, I believe, nine restaurants in Texas. Eight of them have begun their phased reopening. So as somebody who's had to manage through that, what does it look like?

CLAY DOVER: It's difficult, if you think about all the places where guests touch inside of a restaurant, whether it's a soda machine that everyone goes to, people handling your foods. We're fast casual, so we're counter service where we'll make your food and call your name and you come and grab it. So we're not a full service restaurant.

But on Friday, Governor Abbott, the governor of Texas, opened up restaurants for a 25% dine-in occupancy. And so we went ahead and did that. Those restaurants before were serving takeout and delivery only. So for us to open the dining rooms a little bit to a 25% occupancy, we felt that was a safe enough step to take here in Texas.

And last weekend, we did it on Friday. We saw some nice sales increases. But guests are still being cautious. And we're taking every step that we possibly can, washing our hands, increased sanitizing methods. We put the spacer six feet across on the floors. We took away chairs and tables from inside. But there really has to be kind of a recovery plan put together before you just throw your doors open and start letting people in.

JULIE HYMAN: So Clay, quick question about the capacity issue. Do you have somebody at the door who's monitoring that and saying, OK, now you can come in? How does that work?

CLAY DOVER: Yeah, we've actually designated managers that stay at the door to not only oversee-- make sure there's proper spacing in line, we also do obviously a heavy takeout business right now. That's all we've been able to do. So we actually have two lines now, people lining up to order food to eat in the restaurant and then also people lining up to get restaurant-- you know, their food to go in bags.

And so we've got to space those out, as well as we have patios and inside restaurant seating as well. So we've got to kind of-- for the most part, guests have been pretty socially, you know, conscious as far as socially distancing and stepping apart. And you'll see people kind of walk in and, you know, excuse me, and, you know. So it's been pretty good. We haven't had any issues yet. And our hope is that we won't have any.

ADAM SHAPIRO: Clay, here in New York, I was walking yesterday, and there was a big throng of people, no social distancing, lined up for the takeout at a taco place here on Second Avenue. I share that with you because here you are. You're reopening. You're doing the appropriate things necessary. What are you learning works and doesn't work? Because your guests, some of them are just going to start congregating, right?

CLAY DOVER: Yeah, that's a great point. We had a busy day yesterday. We had a couple of instances where when you space out six feet apart, the line seems like it's long, and people naturally want to congregate. You know, you just have to-- what we've learned is you have to just say, hey, we're trying to be conscious here. You know, please give everyone their space.

We have masks available. So one of the things that we've learned is we have disposable masks available for guests. In the state of Texas, it's not mandated inside the restaurant by guests. We are wearing them as a team inside the restaurant. But we started passing out masks and just reminding guests to be conscious of those around.

I would encourage the best way to support restaurants right now is still takeout and delivery. You know, we have the great American takeout every Tuesday. And that happened yesterday as well on top of Cinco de Mayo, on top of open dining room. So it was a lot of things rolling, but it is difficult to make sure that guests are conscious of that.

For the most part, we felt that guests would understand. But it's going to be state by state, county by county. You know, Julie mentioned earlier that we have restaurants in other states. We have a restaurant in Atlanta that we decided to wait to open that restaurant. We could open it up 100%. The governor's outlined 39 guidelines that we have to follow, but we're going to wait a little bit longer there.

Texas, based on some of the direction from the health officials, [INAUDIBLE] felt that were a little bit safer and opening up. And, you know, we'll give it a couple of weeks. There's a phased approach for the state of Texas, as well as every other state. I do think what I would suggest for other restaurant companies or guests going out is just be patient. Be understanding. This is a new world for restaurant operators.

And whether it's the lemons for drinks, you know, we don't put the lemons out anymore. There's no sauce squeeze bottles anymore. We have to individually portion them out. We had a manager handing people water to drink, instead of having the tap running. So there's a lot of nuances that we've got to work through. And for restaurateurs, it's difficult.

RICK NEWMAN: Hey, Clay, Rick Newman here. I want to ask you about liability for anything that might happen with regard to coronavirus. Yeah, right? It's a big issue, right? So they're debating this in Congress. Should there be some kind of liability shield for businesses? Of course, if you shield businesses from liability, what you're shielding them from is their own customers and their own workers. So this is a touchy issue. Do you feel like you need some kind of liability shield?

CLAY DOVER: Yeah, it would be nice to have that, yes. We put up on the front doors of all of our restaurants the recommended guidelines of what we're asking for. And again, we're providing masks for those people who would like masks or if they're uncomfortable in the restaurant or feeling that it's too close. We put down stickers on the ground to space it out.

But it is something to consider. And other restaurateurs, as they're considering opening, need to think about that. For Texas at 25% occupancy, it's really difficult to make money only doing 25% of your volume. Other states are going to have different guidelines. But my recommendation would be, again, think about how you're going to reopen your business.

There's over-- the restaurant industry is projecting by the end of this month $80 billion in lost revenue. And by the end of the year 2020, $240 billion is what the National Restaurant Association. So restaurant operators want to get back to work. We want to get back to serving our guests.

There's great opportunities as we open up for takeout and delivery. The Great American Takeout sponsor, there's over 400 restaurants that are involved in that. Every Tuesday, it's been going on. It's a great way to support the restaurant industry and your local restaurants, whether it's your local barbecue shop or hopefully a Texas-based taco chain. Big and small restaurants are looking for your support as consumers.

JULIE HYMAN: And hopefully, you will be getting it. Clay Dover, CEO

CLAY DOVER: Thank you.

JULIE HYMAN: --of Velvet Taco, all the best to you. Stay healthy and well, and to your employees, as well.