The Cheesecake Factory in trouble?

[Nebraska_Disney]

The 20% salary reduction for executives is a joke! The base salary for the ceo is $995k. Big sacrifice compared to what the rank and file are losing.

Better than nothing and a positive gesture during these crummy times

 

[fsjking]

At my local Simon Mall all the inside restaurants are closed but 12 with outside access are still open including the CF. Granted they are not getting the business they usually get. But I also can't see Simon evicting them, they will probably work out some sort of agreement. I'm sure Simon does not want to loose a long time tenant because of what is going on now. It may not be easy to find someone to take over that space so Simon has to balance that. I'm sure CF said that about not being able to make rents to posture for a change in terms of the lease, if even for a short term basis.

But I also think if I had a GC I would use it just to be safe.

Yeah, the malls know there aren't going to be tenants lining up to take that spot. Malls overall were in trouble before the shutdowns. They aren't going to dump any renters who are saying they plan on being there after this is over.

 

[3threebabies]

Payroll is usually a couple weeks behind, so that will need to be paid after the shut down for the final payroll. Gov't still wants their cut, There are still utility bills to be paid and overhead costs that don't go away just because you are temporarily closed. Rent alone is probably more than 10k per month or considerably higher depending on the market. Im not sure if any of the Cheesecake factories are franchised or if they are all corporate owned. But franchises of these large chains like this, they are not gonna survive. We own a few restaurants, all one type of franchise. Out of approx. 500 stores in the country, only 2-300 will be able to afford to reopen. You put most of your money back into your business to grow it and to pay to get and keep good employees and it takes a really long time to actually make the money people assume restaurant owners make. And that doesn't include royalties to the corp and all sorts of other things. And if and when some of these reopen, it will not be anything like it was before.

Add a zero and multiply a couple times. I would expect there could be premier locations well past $500k/month. In 2003, my national ladies wear chain in a plain old surburban mall paid $75k/month. I worked for a NYC area company with small footprint stores in village Main St locations. In 2008, our most expensive rent was $19,000/month. Ralph Lauren closed its NYC flagship in 2017 because it was cheaper to sit empty with no sales than staff and inventory it. Retail rents defy logic.

Malls need corporate locations that are destination stores with big footprints and sell through. CF is one of those. Mall management companies will renegotiate rents. A well known apparel store planned to close locations and relocate some others to smaller footprints during ‘08 recession. They had several national mall management companies renegotiate their rent for many stores to $0. They only pay a percentage of sales. They closed off entire sections of existing stores because empty selling space costs them nothing. CF is in a great position for renegotiating whether they have the money or not.

 

[SL6827]

Our CF is very new and is stand alone that is close to the mall.

 

[DVCcurious]

Sounds like Cheesecake Factory needs a government bailout

 

[SL6827]

Went in and got my ten slices of cheesecake, (not all for me, but will be shared among my family) it was very somber in there. Made me sad.

 

[kaytieeldr]

My Cheesecake Factory was, naturally, very quiet. They have three tables set up in front of the counter, counting the counter its about five feet between customer and cashier. Three employees, plus of course the cook(s). Just naturally one or two customers inside at a time. Lunch to go on Saturday isn't popular, apparently.

What was entertaining was, in the hour or so I was there (outside, far from the door) waiting to be picked up, several people tried to get into the mall. The first one saw the barrier from a distance and turned around. The others walked all the way to the door - despite signage and a big yellow and orange barrier visible from the parking lot. And there being six cars in the entire lot.

 

[Tikitoi]

I have like $75 in CCF gc's. But also have other restaurants such as Olive Garden Red Lobster and Applebee's to name a few. I'm hoping that these type of restaurants will bounce back. I had said I was going to start using them but I hate the thought of ordering out more than a couple times a month. So that's why I'm hoping even if I have to wait to use them, these restaurants will still be around. At least in my part of town.

 

[mi*vida*loca]

They don’t have a 3-6 month emergency fund?

 

[kaytieeldr]

Hey, c'mon! They're not people, they're corporations! Nobody ever told them about putting away money for a rainy day!

 

[Jimsig]

What was entertaining was, in the hour or so I was there (outside, far from the door) waiting to be picked up, several people tried to get into the mall. The first one saw the barrier from a distance and turned around. The others walked all the way to the door - despite signage and a big yellow and orange barrier visible from the parking lot. And there being six cars in the entire lot.

I had to go to Target at my local Simon Mall today. The mall reminded me as a kid/teenager when most stores in my state were closed on Sunday. Occasionally we would go to the movies on Sunday and the mall had a separate movie theater next door. A lot of times before or after the movie we would walk around the parking lot and the parking garage. A few months ago my 10yo DD and I had to go to the mall and I was telling her how it would be so empty. When I got back today I told her we would take a quick ride this week so she could see what it was like. She is very excited.

 

[WeatherLights]

This thread reminded me that I had a fifty dollar CF gift card. I did a curbside pick up today. I'm definitely in a live-in-the-moment mindset right now so might as well use it. Got a whole cheesecake and a few appetizers. Ended up spending an extra fifteen dollars including a tip. There was a guy leaving with a to-go order and one car in front of me waiting for pick up, and another pulled up behind me. Not brisk business compared to what their usual lunch time crowds probably looked like, but they still had customers.

 

[seashoreCM]

I would doubt that the mall owner (landlord) would be permitted to seize assets if the store (tenant) declared bankruptcy and furthermore if the landlord allowed perishables to spoil it would be responsible for the value even if the landlord's claim was far down on the bankruptcy priority.

 

[gottalovepluto]

I would doubt that the mall owner (landlord) would be permitted to seize assets if the store (tenant) declared bankruptcy and furthermore if the landlord allowed perishables to spoil it would be responsible for the value even if the landlord's claim was far down on the bankruptcy priority.

They haven’t declared bankruptcy, let’s be very clear. That said...

WELCOME! To the world of commercial property! It is very different from residential. Things like spoiled produce for failure to pay rent- not the landlords fault.

Depending on state laws and the leases the landlord could literally change the locks to prevent the tenant from accessing the property until they pay as soon as the day they are late with rent. If they don’t pay, the landlord might eventually be able to seize the assets inside to cover as much of the lease obligations as possible.

At the end of the day maybe they make it, maybe they don’t. Maybe landlords have too much wrapped up in CAKE and need the stores to live, maybe CAKE gets a cash infusion from somewhere or even a bailout? Who knows? I sure don’t.

What I do know
-April isn’t here so they aren’t in default yet
-idk how much leeway their landlords will give them so if I had gift cards I’d spend them to be safe

 

[3threebabies]

The last thing malls need when they open back up are hundreds of LARGE empty restaurant spaces. It is not in their best interest to lose a moneymaker because of a couple months rent. They will negotiate rent to keep CF open for business. Malls do not have retailers or restaurants beating in their doors these days.

 

[pryncess527]

The 20% salary reduction for executives is a joke! The base salary for the ceo is $995k. Big sacrifice compared to what the rank and file are losing.

the Columbia Sportwear CEO cut his own salary down to only $10,000! All while maintaining regular pay for retail employees while the store was closed. I’ll remember these kinds of gestures when stores reopen.

 

[fsjking]

The last thing malls need when they open back up are hundreds of LARGE empty restaurant spaces. It is not in their best interest to lose a moneymaker because of a couple months rent. They will negotiate rent to keep CF open for business. Malls do not have retailers or restaurants beating in their doors these days.

We are definitely in a spot where mall owners need the stores more than the stores need the malls. Brick and mortar was in trouble before this all happened. It's going to be worse after. There will be malls that go out of business over this whole deal(covid).

 

[kaytieeldr]

A few months ago my 10yo DD and I had to go to the mall and I was telling her how it would be so empty. When I got back today I told her we would take a quick ride this week so she could see what it was like. She is very excited.

You reminded me - we used to use the local (now Simon) mall parking lot on Sundays to learn to drive. And to set off bottle rockets.

 

[gharter]

Seen an article saying that The Cheesecake Factory will not be able to pay their April 1st rent payment. I have $50 worth of gift cards to there and I am now wondering if I should order some take out tomorrow to get those spent and not risk them going under and being out that $50. Maybe so?

Absolutely.
Last year, we still ahd gift cards to a local restaurant that wasn't doing well. Luckily, we went, had another great meal, used the gift card. 2 months later, they were closed. Now certainly is not a good time to sit on gift cards.
I looked and we have a gift card to a local movie theater. Nothing we can do with now until they reopen.

 

[SL6827]

Absolutely.
Last year, we still ahd gift cards to a local restaurant that wasn't doing well. Luckily, we went, had another great meal, used the gift card. 2 months later, they were closed. Now certainly is not a good time to sit on gift cards.
I looked and we have a gift card to a local movie theater. Nothing we can do with now until they reopen.

I went and used them. Now I do have two grand worth of Disney gift cards sitting on a cruise reservation for next year, hopefully that won't be an issue.