Article

Avoiding and Managing Burglaries in Your Restaurant

With nothing more than a rock thrown through the window in the middle of the night, a thief gained entrance to a restaurant. The broken window cost $800 to replace. And if that was not enough of a headache, building materials shortages forced the operator to wait weeks to get the glass fixed. The restaurant had to put plywood over the broken glass as a temporary repair, which did nothing for the concept's image.

If restaurants have not suffered enough during the pandemic, an increase in burglaries has created additional grief. In this article, we discuss what you can do to deter these incidents and how to manage the aftermath if your premises is broken into and robbed.

In another incident, the intruder was unsuccessfully looking for cash and went door to door to find the main entrance unlocked. A customer had unlocked and exited the main entrance after the manager had locked the premises. The door did not fully close when the guest left. The manager didn't double-check the door, since he believed he had done his job securing the main entrance for the night. The thief made away with a few bottles of wine.

A broken window or a few bottles of wine doesn't seem like a big deal, but it could have been much worse. Consider the string of burglaries in Lansing, Michigan, where six neighborhood restaurant were robbed within one week.

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The thefts included cash and small electronics, including the tablets used to receive third-party delivery or ders. Travis Stoliker, a co-owner of Saddleback BBQ in Lansing, described the robberies "a punch to the gut to some of us, right after going through the pandemic."

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Police: 15 Fairfax businesses burglarized in 3 weeks

In Fairfax, Virginia, 15 businesses were robbed within a three-week period. The majority of businesses affected were restaurants or grocery stores, and many were minority-owned. Here too, thieves broke the glass front door to gain access. They stole cash and other property.

Why are Restaurant Robberies on the Rise?

Before the pandemic, restaurant operators tended to worry about a different sort of theft. Employee theft or shrinkage accounted for 75 percent of all restaurant theft, according to the National Restaurant Association. Now, external theft is spiking. Why?

In the early stages of the pandemic, restaurants shut down. During March and April 2020, restaurant robberies were crimes of opportunity. People figured the closed restaurants had things of value inside, such as alcohol, electronics or cash. They knew no one was around, and they figured it would be easy to get in and out undetected. Between March 12, 2020 and April 1, the city of New York police department officers logged 763 commercial burglaries, more than double the amount from the same period in 2019. More than 140 of those burglaries occurred in local restaurants. This was triple the rate of robberies New York City restaurants experienced in the same time frame in 2019.

The spring 2020 crime spree wasn't limited to New York alone. Harris County, Texas, which includes Houston, saw burglaries spike by 19 percent in March 2020, as the New York Times reported.

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A New Affliction for Restaurant Owners: Burglaries

One San Francisco restaurant, Bechelli's Flower Market Cafe, lost 20 bottles of liquor after a thief climbed through a window. The owners boarded up the window from inside. Later that week, someone kicked it in to steal more booze. The restaurant had its windows smashed two more times, with losses estimated at $6,000.

Simply Irie, a Caribbean restaurant in Calgary, was also targeted four times. For owner Fay Bruney, the incidents felt personal. She received threatening phone calls warning her to turn down the music played for guests on the outside patio. Thieves stole patio umbrellas and chairs, and caused property damage to her outside patio.

During times of crisis, shoplifting increases. The National Association for Shoplifting Prevention discovered a 16 percent rise in shoplifting after 9/11 and a 34 percent increase amid the 2008 recession. The pandemic certainly qualifies as a crisis, but a year and a half later, some businesses are still under threat of a break-in.

Last winter, the Washington Post reported on an uptick in shoplifting of groceries and necessities as pandemic food aid ran out. There's also been an increase in takeout theft, such as people taking orders that are not theirs from restaurants that use "landing zones" for contactless pickup. Americans are hungry and, whether from restaurants or grocery stores, some are stealing food out of necessity.

Other thieves are acting on a negative sentiment toward a neighborhood restaurant, like Simply Irie. In some cases, there's accompanying physical violence. Henal Chotai, the operator behind Red Cup Cafe in North Harrow, London, recalls a customer who put in an order, then left the restaurant while the food was being plated. He chased the guy to ask him why he left. The customer swore.

The two exchanged words, then the customer threw a punch. Police arrived on the scene and broke up the fight. Chotai laughed off the incident on social media, calling it hospitality "drama" and saying he wished he'd gotten in a punch. He later said via email that it wouldn't be worth it to pursue criminal charges, because "having to go to court would cost me not running my business" and his financial loss was limited to a £12 order that the customer walked out on.

Whether break-ins that cause property damage, like those experienced by several restaurants from spring 2020 through present day, or incidents that escalate to violence, this news is troubling. The majority of businesses targeted by the recent rise in theft are single-unit concepts. Many operators are anxious and worried, two words Stoliker used to describe the sentiment in the Lansing restaurant community. Many, like Chotai, suffered small losses that did not make good business sense to take further action via police or insurance.

Given the rise in theft, independent operators must double down on deterrence. This includes protecting the premises with safety and security features, training employees to know and respond to these risks, understanding their insurance coverage (and limitations), and knowing what to expect when filing a claim if the restaurant is robbed.

Deterrence Strategies

Clearly, it would have been better if none of the aforementioned incidents happened. That said, you might well ask what can an operator do to deter burglaries?

Deterrence practices accomplish two objectives. They make the restaurant a safer place for employees, reducing stress. They also make the restaurant less attractive to a thief, who might pass by your restaurant in search of an easier target.

Thieves tend to look for two things when selecting a target. They want a place that might have lots of cash on hand. They need a quick entrance and exit, preferably in a spot that won't attract a lot of attention. By taking preventative measures, you can make your restaurant look like a bad proposition for them and increase the odds they'll look for an easier target.

There's another reason to invest in deterrence: it might be required for theft insurance coverage. Jeff Kroeger, Head of Commercial Lines for World Insurance, says that more insurance carriers are making it a requirement for theft coverage that restaurants have central station burglar alarms. Kroeger says he's seen this sort of policy exclusion most often in urban areas, but recommends this type of alarm for all operators who want theft coverage.

A central station burglar alarm automatically sends a signal that alerts protective services if the alarm is triggered. The central station is staffed 24/7 with specialists who respond to every alarm. Once they verify it's an incident and not a scheduled opening or closing, the specialists will dispatch investigators and notify the authorities.

In addition to taking cash off premises every night, Kroeger recommends operators install a safe in the restaurant. This way, if someone enters the premises, they can't walk off with cash. Lastly, Kroeger suggests that operators get into the habit of keeping excellent records, just in case they are the victim of theft. This includes keeping a record of cash on hand, something that can be easy to overlook in day-to-day operations.

CHECKLIST

ROBBERY DETERRENCE PRACTICES

Many theft deterrence practices seem like common sense, and can be implemented with a little training and use of checklists. When you make these practices a habit, you will greatly reduce the chance of being targeted:

• Don't keep cash on hand overnight.
• Vary your route and time of day when taking cash to the bank, in case a thief is watching.
• Lock away small electronics and tablets at closing time.
• Always put two employees on opening and closing shifts.
• Have opening/closing employees double-check for safety considerations.
• Never leave the door propped open, even when receiving deliveries.
• Put a peephole or window in exterior doors, so employees can check at a glance whether anyone is lurking outside.
• Have a locksmith replace or update restaurant locks.
• Change the locks if you have not reclaimed keys from employees who quit or were fired
• Install window safety film, which can prevent a window from shattering when a rock is thrown.

"If you purchase equipment, keep the receipts," Kroeger advises. Insurance adjusters will want to see receipts as proof of loss if something is stolen.

Adam May of Property Damage Appraisers agrees. May says that claims can be paid out faster when restaurant owners have purchase receipts, maintenance records, photos and other documentation readily available. An appraiser can review the documentation and work with the insurance carrier and the restaurant to determine a fair value for items that were stolen or damaged during the break-in. "Our standard [for estimating value after a break-in] is five days or less, but it goes back to how well did the restaurant owner document, what are they able to provide to substantiate that claim? If they had nothing. it could progress further," May says.

Security cameras inside and outside can be useful, but these have limitations. Stoliker explains that several of the Lansing restaurants that were burglarized had cameras installed. The cameras either didn't work properly or weren't able to capture a clear picture of the suspect. From a legal perspective, there are privacy considerations. Cameras should not be installed anywhere there is a reasonable expectation of privacy. Inside the restaurant, that might be the bathroom or locker room. Outside the restaurant, a camera should only show the property, not adjacent property.

Exterior lighting can discourage crimes of opportunity by making a thief pass up your business for something where they're less likely to be noticed. At Saddleback BBQ, there is an employee who tends to the meat smokers overnight. The guy is "in and out of the restaurant at night" which does add extra risk, Stoliker says. To deter crime, the restaurant has "lighting and cameras on the smokers and every inch inside, so we're covered."

For the Saddleback team, the worst-case scenario would be a robbery that escalates into violence. "All the doors and iPads [are replaceable], but the worst thing to possibly come out of this [would be] a confrontation with an employee," he says.

Saddleback BBQ wasn't one of the Lansing restaurants targeted by thieves. But the incident "hit really close to home," Stoliker says. Two of the restaurants that were burglarized, Good Trucking Diner and Gump's BBQ, were in close proximity. Stoliker and his co-owner are close with the owner of Good Trucking Diner. It could just as easily have been their restaurant, Stoliker realized.

"If your restaurant is, unfortunately, broken into, let people know so that your neighbors can help you. They can be your neighborhood watch and keep an eye out. It takes a whole community to step up and help," Stoliker adds. He would know: in the wake of the Lansing robberies, Saddleback BBQ stepped up to host a GoFundMe account. All proceeds benefited the Lansing restaurants that were victimized.

Insurance Coverage and Claims After a Theft

Kroeger and May recommend that restaurant owners review their insurance coverage on an annual basis. Insurance carriers change their coverage year over year and can implement exclusions for certain elements, as Kroeger notes with the central station burglar alarm example. What's more, restaurant equipment depreciates over time. May doesn't think it makes sense for a restaurant owner to insure equipment at the purchase price when insurers will look at replacement cost to estimate its value.

"Small business owners don't understand their policies and coverage enough," May says. Reading the policy is the best way to understand the coverage you have and any exclusions that would reduce your protection, though Kroeger notes that this can be "time-consuming and confusing." Your insurance agent should be able to answer any questions about policy coverage or limitations, so you understand the coverage you have.

Kroeger recommends that operators have coverage if cash is stolen, Kroeger says. This coverage tends to have an on-premises limit, like $10,000, so you'll want to keep those regular bank trips. Property insurance will cover property damage and losses due to theft, including restaurant equipment, POS systems, computers, furnishings, entertainment equipment, and electronics. Property insurance is usually part of a business owners or package policy, but it's worth double-checking that coverage meets current needs.

The cost of property damage often outweighs the cost of stolen items. Kroeger gives an example of a thief who came into a restaurant through the ceiling, damaging equipment in the process. Given the steep wait times for supplies to fix the damage, business interruption insurance may be possible. That's a coverage area you might wish to explore.

While the recent rise in theft is external, don't forget about shrinkage. Employee theft or dishonesty coverage protects against employee theft of money and property. This can provide peace of mind in case something goes missing.

CHECKLIST

DESIGNING FOR SECURITY

Modifications and updates to your premises can also deter break-in and theft. Here are a few considerations.

• Light all exterior points of entry with permanent fixtures that are difficult to reach or tamper with.
• Light the interior of your business enough that someone outside the building could see someone inside.
• Install a fence or hedge -- it's your first line of defense.
• You should be able to see through the fence.
• Hedges should be wide, rather than high, and of a prickly, thorny variety.
• Install window locks designed and positioned so they cannot be reached and unlocked after breaking the glass.
• Install safety glass (glazing). It is highly effective at deterring break-ins.
• Install a deadbolt lock/latch in each exterior door.
• Lock overhead and receiving doors with high-quality padlocks.
• Be sure you have adequate lighting both inside and outside your business.
• Exterior lighting should illuminate dark areas around your building and parking lots.

When you have the right insurance coverage for your needs, the odds are higher that any losses due to theft will be covered. Yet it doesn't always make financial sense to file a claim. Your policy's deductible and the amount of lost goods or property damage should inform your behavior. If the loss is less than the deductible, the best course of action is to take the loss. However, if the claim is outside the coverage limits or under the amount of your deductible, talk to your accountant about claiming the expense as a casualty loss deduction.

If the damage exceeds the deductible, you'll want to start the claims process. You'll pay the deductible and the insurance company should cover the rest. They may bring in an appraiser like May to assess the cost of damage and help move the claim along, or they may require you to send paperwork for a desk review.

Kroeger recommends operators "strike while the iron is hot" if cash is stolen. The first order of operation is to call the police, then notify your insurer of the loss. "The longer you wait, the harder it is for the claims department to wrap their head around what happened," he explains.

A Little Help from Your Friends

A constant theme reported by independent operators who have successfully navigated the pandemic is community support. If you decide not to file a claim, there are other ways to get support. Your community can help you recover. One option is a GoFundMe (or similar) campaign to help cover costs related to theft of items or property damage. In Lansing, Saddleback's GoFundMe campaign raised a total of $8,621.00, which was split among six impacted restaurants.

After accounting for GoFundMe fees, each of the affected restaurants received $1,383.60. Saddleback did not take any of the money raised and paid $1,791.83 for Facebook advertising to promote the campaign. They sent out an email to their 20,000-member mailing list and a text notification to 1,000 text message subscribers, which "definitely helped" spread the news, Stoliker says.

Stoliker and his co-owner felt compelled to act out of empathy for the restaurants that were targeted. Since they weren't directly affected, they had time to put together and promote the GoFundMe. The generous campaign also aligned with their concept's pandemic pivot toward offering community support.

After learning that Michigan schoolchildren who rely on free lunch programs would lose food access when schools closed last year, Saddleback BBQ offered a "meals-for-kids" program. They later expanded this to a meal program for first responders and health care workers. Sharing news of the incident on your social media or with local news media can often generate community support. After news of the damage to Simply Irie spread in the community, local businesses stepped up to help. A local landscaping company fixed the damaged patio for free, while a local restaurant owner started a GoFundMe to help the business.

And while a theft or break-in can feel devastating, knowing how to deter criminals and ways to mitigate the damage can be empowering. So too is the generosity of the independent restaurant community as seen in the actions of those who've helped restaurant operators find their footing after a break-in.