The Cheesecake Factory, a popular US restaurant chain, has informed its landlords that it won’t make the April rent because of the coronavirus outbreak.
A letter from David Overton, chairman, founder and CEO of the company which owns and operates 294 restaurants, put landlords on notice that there won’t be rent payments made in April.
Overton explains in the letter sent earlier this month that the Calabasas, California,-based chain was forced to close locations as health officials made efforts to slow the spread of the deadly flu-like virus, also known as COVID-19.
The Cheesecake Factory, a popular US restaurant chain, has informed its landlords that it won’t make the April rent because of the coronavirus outbreak. Pictured is The Cheesecake Factory location in Hackensack, New Jersey
David Overton, chairman, founder and CEO of the company, says the chain was forced to close locations because of the virus and that other restaurants that stayed open were reduced to delivery and to-go orders (pictured)
Overton (pictured) did not say how many restaurants were closed as efforts were made by health officials across the country to contain the deadly outbreak. Slower restaurant traffic resulting from the outbreak was blamed by the founder for cash flow problems
He fails to disclose how many restaurants were shuttered, but says that the locations that were allowed to stay open continued on with delivery and to-go orders.
That move, however, was unable to stem cash flow problems that resulted from a decrease in customer traffic, he discloses in the letter which was posted online by EATER.
Restaurants around the country are in similar situations, as they have been forced to reduce or end operations because of the coronavirus.
COVID-19 has been confirmed almost 74,000 people across the country and has been blamed for almost 1,100 deaths.
The coronavirus has been confirmed in the US in almost 74,000 people and blamed for at least 1,074 known deaths
The company’s chief financial officer says the chain was hopeful landlords would show some understanding.
‘In these unprecedented times, there are many factors that are changing on a daily basis given governmental regulations and landlord decisions to close properties,’ says Matthew Clark in a statement forwarded to DailyMail.com by a company spokeswoman.
The Cheesecake Factory’s chief financial officer says the chain was hopeful landlords would show some understanding. Pictured is one of the chain’s locations in the Canoga Park neighborhood of Los Angeles, California
‘We have to take both into consideration in terms of understanding the nature of our rent obligations and with respect to managing our financial position,’ Clark says.
‘We have very strong, longstanding relationships with our landlords,’ he adds. ‘We are certain that with their partnership, we will be able to work together to weather this storm in the appropriate manner.’
Other companies that have also said they cannot make the rent or are negotiating with landlords include H&M, Mattress Firm and Subway, reports Yahoo Finance.
Meanwhile, fast-food chains that own the real estate used by their franchisees are giving the business owners a break.
Among them, McDonalds, which is landlord to about 15 per cent of its franchises, is considering lowering rent and other payments.