Cheesecake Factory Won’t Pay Rent Next Month, says CEO

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LOS ANGELES — COVID-19 has sent shockwaves through the foodservice industry, impacting everyone along the supply chain. None more so than restaurants, which have had to lay off thousands of employees and shut down many services.

California-based full-service chain Cheesecake Factory has had to furlough approximately 41,000 hourly restaurant staff — a number representing more than 90 per cent of staff employed by the chain as of 2019.

These massive layoffs have led the company to decline to pay its April rent at its locations — the first large chain to take this action.

In a letter to its landlords, CEO of Cheesecake Factory David Overton writes, “Due to these extraordinary events, I’m asking for your patience and, frankly, your help. We appreciate our landlords’ understanding given the exigency of the current situation.”

The letter, given to Eater LA magazine, goes on to note the company hopes to resume paying rent as soon as possible. The chain owns and operates nearly 300 eateries in the U.S. and Canada.

Cheesecake Factory has also announced it will be cutting pay for its corporate and bakery administration employees by between 10 and 20 per cent. Overton and other top executives will cut their salaries for this year by 20 per cent starting April 1 as a response to the financial impact caused by the pandemic.

“As we navigate through COVID-19, the health and well-being of our staff members and guests remains our number-1 priority,” says Overton. “We’ve been following the guidance of the CDC and our local health departments and will continue to do so throughout this evolving situation. At the same time, we’re grateful for the opportunity at present to continue to serve and comfort our guests via to-go and delivery orders.”

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