The Cheesecake Factory, the popular and enduring California-based sit-down restaurant chain behemoth, will not be able to make rent payments for any of its locations on April 1 because of revenue losses due to the novel coronavirus pandemic, according to Eater LA. The chain operates a downtown Chicago location at the John Hancock Center, as well as suburban spots in Skokie, Oak Brook, Lincolnshire, and Schaumburg.
In a letter sent to its landlords in mid-March that was obtained by Eater LA, company leadership asked for patience and understanding: “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,” wrote chairman, founder, and CEO David Overton. “We appreciate our landlords’ understanding given the exigency of the current situation.”
Days after sending the letter, the company announced that it would tap into its $90 million credit line to increase liquidity, and cut back on locations still in development. Around 27 locations have closed, or — like so many independently-owned restaurants — transitioned to carryout and delivery models. The company’s stock price dropped by more than 50 percent in the last month, which when considered in concert with its rent troubles, points to the ever-increasing need for a restaurant bailout.
Founded in 1972, the company runs 294 restaurants in 39 states, plus spots in Washington D.C., Puerto Rico, and Toronto, Canada. It’s also one of the country’s largest restaurant employer, with 38,000 workers. The Cheesecake Factory operates a number of affiliated restaurants, including Rock Sugar Southeast Asian Kitchen and North Italia, which the company said will also fail to make rent payments on April 1. Rock Sugar opened its second ever location in suburban Oak Brook but closed after just over a two-year run.
The Cheesecake Factory is far from alone, as many operators struggle to make this month’s rent. But its economic problems are a stark reminder that nearly every restaurant — indie or commercial — is teetering on the brink of oblivion.