Operation Takeout: Supporting Restaurants In Their Time Of Need

The Restaurant Challenge from the University of Kentucky FCU guarantees revenue for local businesses and a paycheck for their workers.

Top-Level Takeaways

  • In the wake of the coronavirus pandemic, restaurants are closing or changing their operations to stay alive.
  • UKFCU has pledged $50,000 to support local restaurants by purchasing meals for its employees.


Data as of 12.31.19

HQ: Lexington, KY
ASSETS: $978.3M
MEMBERS: 100,443
12-MO LOAN GROWTH: 10.4%
ROA: 1.19%

One month ago, the executive team at the University of Kentucky Federal Credit Union ($978.3M, Lexington, KY) took stock of the changes occurring within its local community.

The credit union, which is headquartered in the middle of bourbon country, has witnessed Lexington’s restaurant scene blossom as of late. Season 16 of the reality cooking show Top Chef was partially filmed in Lexington and aired its season finale in May 2019. The current reality for Lexington’s restaurants is starkly different, however, with the COVID-19 pandemic forcing small, independent, often family-run restaurants to close or make drastic operational changes.

In this environment, UKFCU knew it needed to act.

The little places cant afford to close,says CEO David Kennedy. We’re worried we’re going to lose many of the amazing restaurants we have here.

Kennedy and his VPs floated ideas for how to provide relief beyond donating money. The team wanted to create a tangible impact for those affected and kept coming back to the same idea: Order lunch.

Operation Takeout

In mid-March, the credit union announced its UKFCU Restaurant Challenge. For six weeks, the credit union committed to spending $50,000 with local restaurants by catering lunch for employees who continued to work in its headquarters building and branch locations.

The credit union had already suspended employee travel, so it had available funds in its budget to apply to the challenge. And after the credit union ironed out the economics, the board signed off.

I sent an email and received almost immediate, unanimous support, Kennedy says.

From there, the credit union identified restaurants to support, focusing on locally owned businesses without a national brand behind them.

We wanted those who are invested in the community and run by hometown people, Kennedy says.

The credit union also selected catering from a diverse cross-section of restaurants, not just burger joints and sandwich shops, the CEO says.

We might not be able to save everyone, but we have to try.

David Kennedy, CEO, UKFCU

UKFCU reached out to a number of restaurants before it selected an initial group of five to support. Kennedy advises credit unions that might want to sponsor a similar challenge to be upfront, honest, and transparent with restaurant owners in those initial conversations. The coronavirus has totally changed the restaurant business, and the credit union found some restaurants would be in a worse financial position if they were to remain open for one guaranteed good sales day per week.

For some, it was cheaper to shut down and take out $8,000 on their home equity line or use a business continuance loan and pay their lease each month, Kennedy says. That’s compared to keeping the doors open, paying food, employee, and utility costs.

Carryout During Coronavirus

Gwyn Everly is the co-owner of J. Render’s Southern Table Bar in Lexington, one of the restaurants selected by UKFCU as part of its Restaurant Challenge. She says the restaurant has always had a healthy carryout business, but closing dine-in options has caused sales to fall to 30-40% of normal. Everly made the difficult decision to layoff most of her staff as the restaurant pivots to a carryout-only model and abbreviated hours.

With the changes to unemployment to include those who rely on tips, and the relief being paid out, [our employees] are making more than they would be able to in the restaurant with just carryout and delivery business, Everly writes in an email.

With fewer sales, income has dropped despite the bills continuing to roll in. And although most of its creditors are understanding today, Everly is concerned that when all is said and done, small businesses will be left with an even heavier debt load to manage.

When UKFCU approached her to participate in its Restaurant Challenge, Everly was thankful and surprised. She now knows she has reliable weekly sales and revenue, without which her situation might be bleaker.

Despite the shutdown, we still have obligations that must be paid, she says. I am thankful UKFCU adopted us, and we will never be able to repay that debt. When the going gets tough, you find out who your friends are. UKFCU is definitely a friend to restaurants and to us, personally.

How To Support Restaurants

Gwyn Everly, co-owner of J. Render’s Southern Table Bar in Lexington, KY, has advice for those who want to support restaurants in the coming weeks and months: Continue to order carryout. If the restaurant offers delivery, opt to order directly from them rather than a third-party vendor.

The Challenge Is Far From Done

Initially, UKFCU planned to support five restaurants across its six-week Challenge. But what it didn’t account for was the generosity of the restaurant industry.

We had several restaurants tell us they appreciated what we were doing for them, but could we help out others as well? CEO Kennedy says. They say, We’re going to make it though this, but I’m worried about my friend here. We’ll give up a day if you will use that money to purchase from them.

Which, of course, the credit union was willing to do.

When the six-week Challenge ends, the aid will not. Kennedy and his team continue to transition more employees to remote work; as such, catered lunches to the headquarters and branches will transition, too. Instead, UKFCU plans to donate food from restaurants to area food banks, homeless shelters, and other organizations that support at-risk populations; already it has partnered with the Lexington Rescue Mission. And if it can, Kennedy hopes his organization can find a way to support breakfast and lunch programs at public schools some of which have shut down in the wake of the coronavirus pandemic.

Kennedy points to the role of credit unions in this crisis, calling for those organizations with hundreds of millions in assets to give back, and lift up, those affected. The industry already takes care of its members, he says, it’s time to take care of the communities in which they live.

If they can, he encourages credit unions to help beyond simply writing checks. There’s a feeling of accomplishment and dignity that comes from doing what you love to do, he says. That’s the difference between cooking dinner and cashing a check. But ultimately, support in whatever form is what matters whether member-focused or community-based. Credit unions can make a difference.

We can impact this country in a major way if we get behind community initiatives, Kennedy says. We have to get some of the little folks back in business, get their employees back working, and tell them they’ve got the financial support to do it. We might not be able to save everyone, but we have to try.


April 22, 2020

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