By Kenneth Garger March 26, 2020 | 3:13am Enlarge Image A Cheesecake Factory restaurant in Yonkers, New York. Angel Chevrestt Sign up for our special edition newsletter to get a daily update on the coronavirus pandemic. More On: Coronavirus Los Angeles to shut off water, power of nonessential businesses that refuse to close Man busted for soliciting investments in coronavirus cure scam Actors' union starts emergency fund for struggling artists during coronavirus shutdown CDC to launch new surveillance system to track coronavirus spread One of America’s most popular restaurants, The Cheesecake Factory, reportedly cannot afford April’s rent at any of its nearly 300 locations due to the financial strain caused by the coronavirus pandemic. The Cheesecake Factory’s founder and CEO, David Overton, notified the company’s landlords of their inability to pay in a March 18 letter obtained by Eater. Overton said the company’s revenue took a hit as some restaurants were forced to close in accordance with government restrictions that have been imposed across the country to prevent the spread of the virus. Restaurants that have remained open are only able to provide delivery and takeout services, he said. “The severe decrease in restaurant traffic has severely decreased our cash flow and inflicted a tremendous financial blow to our business,” Overton wrote. He added: “Unfortunately, I must let you know that The Cheesecake Factory and its affiliated restaurant concepts will not make any of their rent payments for the month of April 2020.” The Cheesecake Factory operates 294 restaurants. It has locations in 39 states, the District of Columbia, Puerto Rico and Canada, according to Eater. The company in 2019 acquired Fox Restaurants Concepts. Overton, in the letter, said the company hopes to resume rent payments “as soon as reasonably possible.” A company spokesperson told Eater, “We have very strong, longstanding relationships with our landlords. We are certain that with their partnership, we will be able to work together to weather this storm in the appropriate manner.” https://nypost.com/2020/03/26/the-c...ril-rent-because-of-coronavirus-restrictions/
Glad i'm not the only 1 who operates on a barely enough to get by plan. Really would think big companies would have cash in the bank from profits.
Average Cheesecake factory does $10.7m per year in sales. Their profit margin is only 5.1% When you suddenly lose 75% of your business, but your expenses stay the same, you lose a lot of money. They had $58m in cash and made $127m in profit last year so they pretty much had half their money in the bank from 2019. After CV lockdown, I estimate they were losing $5 to 6m per day. That gave them 2 weeks to figure out what to do.
Started to hear of suicides already, lost jobs, no money, locked in, scared of a little ( size of ) Virus, this will kill more than the virus but nobody will report on it.
Here is what makes my head spin...If the tenant cannot pay (yet gets some stimulus of some sort), the landlord does not collect (let's assume he gets some temporary assistance as well), then how and when do we collectively re-establish the prior landlord/tenant relationship?
The knock-on effects of this are too enormous for my mind. Just the concept of one party essentially breaking the lease (on a global scale) is enough, but again if both parties see some sort of relief, then it's almost impossible to go back to the previous business arrangement. And now you'd have to re-write all contracts with a new form of pandemic insurance (who knows what that would cost). The ultimate game changer.
As Trumpy says, the Cure is definitely worse than the disease And we'll be feeling it for decades if this goes on for 18months, via over control / lockdowns and Zig Zagging maybe times
It's a real catch-22. A restaurant business, as others have mentioned, is usually very thin margins and closing for even a week could put some under. Even at 2 weeks and beyond, it was probably a complete game changer. At this stage and with the panic set in, I'm afraid that even if everything were declared open per usual, the traffic would be a fraction of what it was (not just because of job losses, but the fear of crowds of people). Still, all of it, too big for me to still comprehend.