Regulatory and Legal Affairs

📌 The Bank of England cut the borrowing rate by 0.25% to 5% from 5.25% on 1 August, following stable 2% inflation in June. The Night Time Industries Association (NTIA) CEO Michael Kill called it a significant step for the hospitality sector, struggling with high interest rates post-pandemic. Bank Governor Andrew Bailey cautioned against expecting large cuts soon, prioritizing low inflation for economic growth. UKHospitality urges further rate reductions and business rate reforms for the sector's recovery.

🌮 Yum! Brands plans to implement Voice AI across hundreds of Taco Bell drive-thrus in the U.S. by the end of 2024. Currently, the tech is in over 100 locations across 13 states. Benefits include improved order accuracy and reduced wait times. A two-year testing phase has shown positive results. KFC Australia is also trialing Voice AI. Yum!'s 2023 digital sales neared $30 billion, with digital channels accounting for over 50% of first-quarter sales in 2024.

💳 Integrated payment systems enhance hotel and restaurant experiences by providing seamless transactions, automatic data updates, and advanced security features. Hotels benefit from connectivity with property management systems (PMS) and point of sale (POS) systems for real-time data exchange. Guests enjoy multiple payment options, including Dynamic Currency Conversion (DCC) and tokenized card details for secure transactions. Hospitality businesses gain operational efficiency and detailed analytics for informed decisions.

🍕 PizzaForno, a 24/7 automated pizzeria, expanded in the first half of 2024 by launching in six U.S. states: Utah, California, Delaware, New York, Florida, and Maryland. In 2024, they awarded 39 new units nationwide, nearly doubling the expansion from the first half of 2023. Mexico saw 20 locations secured, aiming for over 100 units soon, while Canada installed 18 new units. The U.S. expansion included 10 units each in Utah and Michigan, 10 in Key West, Florida, plus single and double unit awards in Texas, New York, and California. Mexico City welcomed the brand's inaugural unit, with plans for expansion in major cities. PizzaForno aims for 25,000 operating units by 2028, targeting campuses and unconventional locations, offering diverse pizza options accessible via digital screens and an app.

💳 U.S. merchants paid nearly $100 billion in swipe fees in 2022 with an average credit card processing fee of 2.24%, potentially rising to 3% per transaction. Swipe fees have doubled over the last decade. Merchants incurred $72 billion in fees last year. Selection of a payment processor is critical for hotels, motels, and B&Bs to avoid high costs and payment mismanagement. Integration with property management systems enables efficient operations, while transparency, affordability, mobile payment solutions, and strong customer service are key processor features to consider.

💸 The California Supreme Court unanimously upheld Proposition 22, which classifies drivers for companies like Uber and DoorDash as contractors, not employees. The decision, confirming a previous appeals court ruling, maintains the outcome of the $200 million lobbying effort by delivery apps for the bill passed in November 2020. This follows the AB5 bill, effective January 1, 2020, which aimed to consider such drivers as employees. Critics argue this contractor status denies drivers employee benefits, while proponents cite work flexibility. The recent ruling is seen as the final say after over four years of legal battles.

🏖 Gotham Restaurants LLC, known for operating Gotham Restaurant (previously Gotham Bar and Grill), filed for Chapter 11 bankruptcy in New York on Wednesday. The company owes nearly $484,000 to its largest creditor, the NY State Department of Taxation Finance Bankruptcy/Special Procedures Section. Other debts include nearly $97,000 to Dairyland and approximately $84,000 to Baldor Specialty Foods. The 40-year-old restaurant, a Manhattan dining landmark, closed in June due to a $45,000 cyberscam. Founded in 1984 by Alfred Portale, it became a trendsetter in the late '80s with "tall food". Portale left in 2019, and Ron Paprocki led as executive chef before the filing, which reported assets between $1 million and $10 million.

🍝 U.S. Sen. Dick Durbin and Rep. Rosa DeLauro introduced legislation to establish the Federal Food Administration, transferring food safety oversight from FDA. Hazel Analytics data from 2023 shows increased food safety violations post-pandemic. In 2022, the CDC reported a rise in consumer risk to foodborne illnesses. The new agency would include FDA's current food programs and operate under the Department of Health and Human Services. The initiative aims to prevent illness and death from contaminated food.

💸 Sen. Ted Cruz and others introduced the “No Tax on Tips Act,” exempting cash tips from federal income tax starting in 2025. President Trump, at the Republican National Convention in Milwaukee, endorsed the act, citing a Nevada server's complaint about tax on tips. This act could impact restaurant industry employees, as tips comprise 71% of their minimum wage. Critics argue that about half of tipped workers don't earn enough to pay federal income taxes, and the act doesn't exempt employer payroll taxes or state taxes on tips.

📌 The National Labor Relations Board (NLRB) withdrew its appeal of a federal judge's ruling against the broadened joint employer rule in May. The rule, expanded last fall and struck down by multiple government branches, could have held franchisees and franchisors equally liable for labor terms. The NLRB still supports the legality of the rule despite the blocked appeal, which leaves the possibility of a future challenge open.