Cheesecake Factory Can’t Pay Its April Rent, Asks Its Landlords for 'Help' and 'Understanding'

After the COVID-19 coronavirus took a large bite out of its first-quarter cash flow, The Cheesecake Factory (NASDAQ: CAKE) sent a letter to its landlords telling them it's unable to pay the rent on its restaurant locations for the upcoming month. With rent due for many of its 294 outlets on April 1, the company simply lacks the funds to meet its obligations on time. In the letter, CEO David Overton went on to write that no information is available on when the restaurant chain can resume paying, but says it will do so at the earliest possible opportunity.

Image source: The Cheesecake Factory.

Overton made a direct appeal to the company's landlords, stating, "I am asking for your patience, and frankly, your help." He added: "we realize the impact this action will have on our landlords. We appreciate our landlords' understanding." In follow-up statements, The Cheesecake Factory's executives revealed that the casual dining establishments gained through its recent acquisition of Fox Restaurant Concepts, such as North Italia, Flower Child, and The Arrogant Butcher, are also unable to meet their April rent obligations.

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Source Fool.com