The Cheesecake Factory told its landlord this week that they will not be able to pay rent on April 1 due to the loss of business caused by the Wuhan coronavirus pandemic. The Cheesecake Factory currently operates 294 locations in 39 states around the country.
According to a report by Eater, the Cheesecake Factory chain announced this week that it will not pay rent at any of its 294 locations around the country for the month of April. Like many other restaurants, the Cheesecake Factory has suffered during the ongoing Wuhan coronavirus pandemic.
In a letter sent to the company’s landlords, Cheesecake Factory CEO David Overton explained that the Chinese virus pandemic has significantly reduced the company’s cash flow. Overton then acknowledged that the Cheesecake Factory will not be able to pay rent for the month of April.
Due to these extraordinary events, I am asking for your patience and, frankly, your help. 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. Please understand that we do not take this action or make this decision lightly, and while we hope to resume our rent payments as soon as reasonably possible, we simply cannot predict the extent or the duration of the current crisis. We are continuing to evaluate the implications of this situation on our business and we realize the impact this action will have on our landlords. We appreciate our landlords’ understanding given the exigency of the current situation.
The Cheesecake Factory is one of the largest restaurant employers in the country. With locations in 39 states, the Cheesecake Factory employs 38,000 Americans. Since the beginning of the Wuhan coronavirus pandemic, the Cheesecake Factory has complied with federal health guidelines by offering curbside pickup and delivery services. At the same time, the chain shut down 27 locations and drew $90 million on its revolving credit facility to increase cash flow.
Despite the setbacks, Overton remains confident. In a brief statement on March 23, Overton told the press that the chain will use its 42 years of industry experience to pull through the crisis.
“The coronavirus pandemic has had an unprecedented impact on the restaurant industry as containment measures escalate,” Overton said. “While the situation remains fluid, we are taking decisive but difficult actions to enable our restaurants to manage through the specific circumstances in their communities, while further strengthening our liquidity position. With 42 years of history as a guide, we believe we will overcome these challenging near-term operating conditions and be even better positioned for the long term.”
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