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The Cheesecake Factory cannot afford to pay April rent for its nearly 300 restaurants because of the hit its business has taken during the coronavirus pandemic.
Cheesecake Factory chairman and CEO David Overton reportedly told landlords in a March 18 letter that a “severe decrease in restaurant traffic” has caused a "tremendous financial blow" amid the COVID-19 outbreak, as many locations have been forced to completely close, while others can only serve take-out and delivery.
"Due to these extraordinary events, I am asking for your patience and, frankly, your help,” Overton allegedly wrote in the plea, obtained by Eater Los Angeles. “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.”
The restaurant employs over 38,000 people across 294 locations through the U.S. and Canada, making it one of the largest restaurant employers in America.
The Cheesecake Factory has already closed 27 locations since the coronavirus outbreak began, Eater reports. Moving forward, the restaurant told investors that it will halt the development of unopened restaurants and tap into a credit line of $90 million to increase cash.
Through its 2019 acquisition of Fox Restaurants Concepts, Cheesecake Factory also owns affiliate establishments Flower Child, The Henry, Culinary Dropout, Blanco, Dough Bird, Olive and Ivy, The Green House, The Arrogant Butcher, Zinburger, Wildflower and The Rocket.
When reached for comment regarding news of the restaurant’s April rent, a spokesperson for Cheesecake Factory shared the following statement with Fox News on behalf of 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,” Clark said. “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.”
In happier headlines, Cheesecake Factory recently started to offer free slices of cheesecake with select orders during the outbreak.