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As limited dine-in begins in the Carolinas, will restaurants stay afloat?

Some say certain business models aren't sustainable under limited capacity restrictions.

CHARLOTTE, N.C. — As the door cracks open on dine-in service in the Carolinas, some restaurants are eager to get going again. Others might find it's still not feasible to reopen or expand from their current take-out models.

At 5Church in uptown Charlotte, owner Patrick Whalen says it's take-out and delivery only, per state order. But even at the 5Church Charleston location, where patio service is now allowed, they don't plan to start that added venture.

"It's impossible for me as an employer to ensure the safety of either the guests or the staff, and I just can't, in good conscience, allow that to happen," Whalen said.

But apart from safety, it might not make good business sense either.

Whalen says most full-service places, like his, are designed to operate at high capacity, and anything less than that is costing more money than it's making.

"It just doesn't work," Whalen said. "If your profit margin is 10% at a normal restaurant, and you cut your volume by half, there is no profit. You're operating at a loss."

Dr. Donald Schoffstall, an associate professor specializing in Hospitality Management at Johnson & Wales University, says while some restaurant concepts might be able to more easily pivot to social distancing and limited seating, others will choose not to.

"To increase all of your staff in order to make that guest service work for only a 25% capacity in a dining room," said Schoffstall. "It may not be reasonable for some restaurants to open."

It's not yet known what a limited reopening of restaurants will look like in North Carolina, but Governor Roy Cooper has said reduced capacities at restaurants would be part of the "Phase Two" of the state's reopening plan. That phase is set to take place in the 2 to 3 weeks after the stay at home order is lifted. 

State leaders continue to be optimistic that "Phase One" can start this week.

RELATED: North Carolina could begin Phase 1 of Governor Cooper's reopening plan next week | Real-time updates for Friday, May 1

In South Carolina, dine-in is now allowed outdoors, with tables spaced eight feet apart and fewer than eight people per table.

Schoffstall says that can be helpful to places with outdoor areas, but even those might face limitations.

"That's a large patio (needed) to get a lot of tables," said Schoffstall. "Maybe it's a small number, in reality."

RELATED: SC governor lifts mandatory home or work order, allows outdoor restaurant dining

Whalen says it's difficult, but they are still trying to figure out how to make their business model work with coronavirus restrictions in place.

"It requires participation from a lot of the fixed expenses that exist out there--your landlords, your third-party vendors, your staff," said Whalen. "Everyone would have to give something economically to be able to be open without being in the red."

While now might not be the right time for his staff to welcome guests back inside, they're planning for the day they will.

"I don't have all the answers. I don't think any owner, who's being honest, can say that they do. Being hopeful, even if it's just for small goals rather than the end goal, is the best that I can do right now."

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