The Cheesecake Factory Won’t Be Paying Rent In April

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The Cheesecake Factory informed its landlords that it would not be making its rent payments in April, according to a letter obtained by Eater LA.

In the letter, company chairman and CEO David Overton wrote that the chain had seen a major decline in income because of restrictions on social gatherings, dining rooms closures, and social distancing in an effort to curb the coronavirus outbreak.

“This situation is unprecedented and rapidly evolving,” he wrote: “The severe decrease in restaurant traffic has severely decreased our cash flow and inflicted a tremendous financial blow to our business.”

Overton went on to say that none of the Cheesecake Factory locations, including affiliated restaurants, would be making rent for the month of April due to these financial constraints.

“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,” he wrote, in part.

You can read the full letter on Eater.

The Cheesecake Factory issued this statement to Delish from Chief Financial Officer Matthew Clark:

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.

A Restaurant Business Online report also pointed out that The Cheesecake Factory recently informed investors it would be drawing down on a $90 million credit line and pausing all restaurant development.

This situation is not uncommon as an effect of the coronavirus outbreak, as restaurants and food businesses around the world have issued lay-offs and closures amid severely decreased income.