It appears the Cheesecake Factory is first in the revolution, having pretty much declared they’re going on a rent strike in April.
Eater Los Angeles reports that the company has informed landlords for all 294 of its storefronts nationwide that it won’t be paying rent on April 1. Cheesecake Factory’s taken a hard hit thanks to social distance measures implemented in many states across the country, having closed several dozen locations and lost 50 percent of its stock worth since the coronavirus pandemic hit the United States.
Cheesecake Factory CEO David Overton informed landlords they’ll be skipping April’s rent in a letter, which Eater published in full. Here’s a segment:
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.
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.”
Cheesecake Factory’s not the only tenant that’ll probably have trouble paying rent next month. Businesses all over the country have lost foot traffic, pivoted to delivery, or closed up altogether. Some may never reopen, in large part because they won’t be able to afford their rent.
And let’s not forget the huge number of Americans who have already lost their jobs or will in the near future, as the economy continues to careen and the federal government offers only meager financial assistance. A number of state legislators and tenant activists are trying to get governors across the country to enact commercial and residential rent freezes—the first of April is coming fast, though, and time is running.
So, to the Cheesecake Factory, I say: thank you, comrade, and please forgive me if I word-for-word copy that letter and mail it to my landlord in lieu of a check.