One of the largest restaurant employers in the country has just announced that they will not be able to make rent on April 1. The cheesecake factory, notable for family and group dining, maintains 294 restaurants and 39 states including 39 locations in California. The restaurant has sent a message to all of its landlords stating that due to a severe decline in restaurant traffic they will not be able to make rent payments.
"As you know from news reports, we have had to close numerous restaurants in order to comply with emergency governmental restrictions. In some locations we are only allowed to provide delivery and to-go orders; in other locations we are required to totally close. This situation is unprecedented and rapidly evolving. The severe decrease in restaurant traffic has severely decreased our cash flow and inflicted a tremendous financial blow to our business," Chairman and CEO David Overton wrote.
“We appreciate our landlords’ understanding given the exigency of the current situation.”
Due to the coronavirus pandemic, the cheesecake factory has had to close down 27 locations across the country. Other locations have transformed into a take out and delivery only model according to either Los Angeles.
In these unprecedented times, there are many factors that are changing on a daily basis given governmental regulations and landlord decisions to close properties. 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. 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.
The company hopes to resume their payments very soon.