Restaurant organization requests landlord rent waiver due to second wave of COVID-19
In a letter to mall owners and owners, the National Restaurant Association of India called for a revenue-sharing model, no guaranteed minimum rent for six months and more.
The National Restaurant Association of India has now written to owners and owners of shopping centers for a waiver of rent and other relief after restaurants were hit hard by the second wave of coronavirus and the localized lockdowns that followed in several States.
The restaurants body said much of the industry managed to survive the first cycle of foreclosure “through the collective efforts of all stakeholders” and said similar efforts are needed to prevent the sector. “
Calling the second wave a “bodily blow that many will not be able to resist”, NRAI said it represents the interests of more than 5 lakh restaurants and has an annual turnover of Rs 4 lakh crore employing 70 lakh people.
In its letter to owners and malls, the organization called for a complete waiver of rentals and maintenance of common spaces (in malls) until unrestricted dining is not allowed.
Restaurants in many states are only open for deliveries and take out. NRAI called for a pure revenue sharing model as long as the restricted operations (delivery only, limited working hours, limited capacity, etc.) continue. In a revenue sharing model, the restaurant shares a percentage of the revenue it earns with the owner. NRAI also asked for a rent model with no guaranteed minimum for six months after that.
To owners, NRAI said that for restaurants with a longer history of occupancy, this revenue share “can also be tied to their sale as a percentage of their sale in the past period.”
In its letter to mall owners, NRAI said the second wave could hurt consumer feelings in the long run. “With high fixed overheads, expected restrictions on hours of operation, revised social distancing standards and reduced capacity utilization, any drop in consumer sentiment can spell disaster for the industry. Surely we have a dark battle at hand and the most powerful tool to combat this is to redefine our relationship and our business model. If the industry survives, we will all survive and maybe hope to prosper later, ”he said.
NRAI President Anurag Katriar said: “While the two waves of the pandemic have dealt us a crippling blow, there is a big difference this time around. While the scarcity of resources was at the heart of our problems during the first phase and forced significant mortalities, this second wave could actually hurt us more in the long run due to low and moderate feelings of consumers. It is a much deeper problem. “
“With high fixed overheads, expected restrictions on hours of operation, revised social distancing standards and reduced capacity utilization, any drop in consumer sentiment can be catastrophic for the industry,” he added. .
To shopping center owners, NRAI has asked that fixed expenses for the duration of the lockdown be removed entirely and that the engagement model should evolve into a variable model.