The Cheesecake Factory Tells Landlords Across the Country It Won't Be Able to Pay Rent on April 1

[TeamPooka]

The Cheesecake Factory Tells Landlords Across the Country It Won’t Be Able to Pay Rent on April 1

The chain restaurant says closed dining rooms and “extraordinary events” are the reason for not paying rents

The Cheesecake Factory, one of the most popular sit-down restaurant chains in the country, says it will not be able to make upcoming rent payments for any of its storefronts on April 1 because of significant loss of income due to the coronavirus crisis.

The Calabasas Hills-based company informed all of its landlords in a letter dated March 18 (reproduced below) that a severe decline in restaurant traffic has decreased its cash flow and “inflicted a tremendous financial blow” to business. Cheesecake Factory’s affiliated restaurants, such as Rock Sugar and North Italia, will also not make April 1 rent payments.

Company chairman and CEO David Overton writes, “Due to these extraordinary events, I am asking for your patience, and frankly, your help.” He continues, “we appreciate our landlords’ understanding given the exigency of the current situation.” The letter says that the company hopes to resume paying rent as soon as possible.
In telling landlords that it will not able to pay rent, the Cheesecake Factory essentially confirms that it is in the same position that many independent restaurateurs currently find themselves in. In a statement to investors on March 23 — five days after the letter to landlords — the Cheesecake Factory announced that it would curtail development of unopened restaurants and tap into a $90 million credit line to increase its available cash. Since the outbreak of the coronavirus, the Cheesecake Factory has closed 27 locations across the country, and pivoted other locations to a takeout and delivery-only model — which it said just days ago was enabling the company to “operate sustainably at present” — and its stock price has fallen by more than 50 percent in the past month.

more at link
https://la.eater.com/2020/3/25/21194144/cheesecake-factory-rent-strike-chain-restaurant?utm_content=eater&utm_source=twitter+&utm_campaign=eater.socialflow&utm_medium=social+&__twitter_impression=true

[RT Atlanta]

1. "force majeure"

is going to get a lot of scrutiny under what are 'acts of god,' restrictions imposed by law, etc. there will be lotsa legal fights over this in the coming weeks/months/years.

[Botany]

2. So I will have no place to go for crappy food?

Just saying'.

[unblock]

3. domino's delivers!

they're one of the few businesses that is going great during this mess.

[JHB]

14. That kind of thing happens when literally all of your business is delivery and take-out.

[USALiberal]

5. FFS, that is your take away? nt

[getagrip_already]

4. republican landlords are going to be selling a lot of restaurant equipment and furnishings.....

in the coming months. Bad luck for you, good luck for them.

They will sell you the furnishing back at a good price if they haven't sold them by the time you get some cash though. So you won't have to pay retail and start over.

[ripcord]

7. Why would you say only republicans are landlords?

Sounds rather ignorant to me, I'm having to work with my tenants to makes sure we can all get through this and you are making stupid statements.

[getagrip_already]

9. I didn't say only republicans were landlords....

What I said was republican landlords will, in essence, take delight in for foreclosing on businesses that don't pay rent exactly on schedule.

Lots of landlords will work with tenants to accommodate this crisis. The ones that won't will be wearing red hats.

I didn't mean to sweep you up in that post. Apologies.

[ripcord]

16. No problem

I'm a little testy right now, probably too much.

[Mike Nelson]

6. I like that place...

... and know someone who works there.

[Demovictory9]

13. ..

[Sherman A1]

8. But, don't they have a rainy day fund of at least 3-6 months of expenses?

We as peons are told that is what we should have at all times.

[getagrip_already]

10. they do, but not on the books.....

That money goes offshore to be safe from the damned libs. Silly person.

[Sherman A1]

11. Well,

Then they can jolly well go get some cash and pay their bills, just like we have to do before leaving their restaurant.

[A HERETIC I AM]

15. Oh, come on.

I'm not in the business, but from what I know about it, restaurants work on a fairly thin margin. They need butts in the seats.

Not every company has an account in the Caymans

[Blue_true]

17. Exactly right. nt

[Demovictory9]

12. a big company like that?

[Blue_true]

18. Maybe it is just me, but I read once that the company has been struggling

for a while. Clearly a massive shift in customer behavior that reduce business is the last thing that it needed.

[Roland99]

19. They had no cash buffer?