Coronavirus has caused the market to sour on the restaurant industry, and now some of America’s largest and most popular chains are beginning to crumble. On March 18, The Cheesecake Factory sent a letter to its landlords informing them that it will not be able to make upcoming rent payments for any of its storefronts on April 1 due to a significant loss of income due to the coronavirus crisis.
The Calabasas Hills-based restaurant chain’s affiliated restaurants (Grand Lux Cafe, RockSugar, North Italia, Flower Child) will also fail to make April 1 rent payments.
In the letter, Chairman, Founder and CEO of The Cheesecake Factory David Overton wrote, “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.” Adding, “We appreciate our landlords’ understanding given the exigency of the current situation.”
Cheesecake Factory told Eater 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.”
Cheesecake Factory has 211 locations and 38,800 employees, making it one of the largest restaurant chains in the country. Many of the company’s landlords are malls, including Simon and Westfield.
Cheesecake Factory has pumped the brakes on all unopened restaurant development. The company has closed 27 locations around the U.S., while turning other storefronts into takeout and delivery options. That is allowing Cheesecake Factory to “to operate sustainably at present,” according to a statement from the company on March 23. Their stock price has fallen over 50 percent in the past month.
