Regulations instituted across several states forced restaurants to close as a way to help stop of the spread of the virus. The closures have resulted in a significant revenue decrease for the company.
In a letter addressed to the company’s landlords, CEO David Overton wrote that the “severe decrease in restaurant traffic has severely decreased our cash flow and inflicted a tremendous financial blow to our business.”
“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,” Overton wrote in the letter.
Matthew Clark, chief financial officer for the Cheesecake Factory, said in a statement to CNN Business that the company has “very strong, longstanding relationships” with its landlords.
“We are certain that with their partnership, we will be able to work together to weather this storm in the appropriate manner,” Clark said.
That business model is now a liability. These days, those chains have to quickly figure out ways to ramp up off-site orders while keeping their companies afloat.
“Most of the bigger players will find a way to survive,” R.J. Hottovy, a consumer strategist for Morningstar previously told CNN Business. But “it’s not going to be easy.”
–CNN Business’ Danielle Wiener-Bronner contributed to this report.
