Restaurateurs' SoS to property owners on rent waiver as Covid hits biz

Proposes revenue-sharing model for deliveries, limited-hour dine-ins; wants guaranteed rent clause upon lifting of lockdowns to go

National Restaurant Association of India (NRAI), the apex industry body in the country, has sought financial relief from property owners of food and beverages outlets. In an open letter to all property owners, including malls and high streets, the association requested for a slew of measures including complete waiver of rent as long as Covid-related restrictions are in place.

Citing the severe impact of the second Covid wave on restaurateurs, the NRAI has put forward a bunch of proposals to real estate owners in the country. Firstly, it has sought a complete waiver of rentals and common area maintenance charges till restriction on dine-in businesses are in place. For the period when operations are restricted to deliveries or limited hours of operations or any limit on capacity utilisation, it has proposed that a revenue share model should be followed.

Secondly, it has requested landowners to provide relief from the clauses like minimum guaranteed rents for six months once the restrictions are lifted and has proposed a pure revenue share model instead. “For stores with longer past occupancy records, this revenue share can alternatively be linked to their sale as a percentage to their past period sale”, it said. Further, NRAI has asked them to bring down common area maintenance charges to 50 per cent of the agreed rate during the period.

“You all are well aware that we were just about recovering from the travails of the first lockdown and bracing for some normalcy but this second wave of Covid has come as a rude shock to us. For an Industry already burdened with massive losses of the past, this has come as a body blow that many will not be able to withstand. We fear massive mortalities and job losses in the sector as we fight a very grim battle for our survival”, Prakul Kumar, secretary general of NRAI wrote in the letter.

According to him, while the first wave had significantly damaged the industry’s financial health, in the second wave the restaurant business is even more vulnerable as businesses have much depleted resources now, making the situation grimmer. As per NRAI, with an Rs 4.25 trillion annual turnover the sector contributes 2.1 per cent to the country’s gross domestic products and employs seven million people directly.

Incidentally, poor sentiment and lower footfalls at malls led to a drop of up to 50 per cent in rentals in the March quarter, even before the second wave became severe. To check the slide, many mall owners were already offering longer revenue share options to retailers of 6-12 months. However, most mall owners are yet to decide on waiving rentals completely.