Restaurant Brands International defers rent and offers cash advances to franchisees
- Restaurant Brands International to offer £56.73 million in rebates & cash advances to franchisees.
- RBI is offering £2.40 hourly bonus to its workers at all three of the subsidiaries in North America.
- The company has £2 billion in cash after completely drawing down the revolving credit facility.
The ongoing Coronavirus pandemic is weighing heavily on the U.S restaurant industry with the majority of the dine-ins suspending operations and consumers preferring to eat at home to minimize the fast-spread of the flu-like virus.
In order to extend support to its countrywide operators amidst the business disruptions, Restaurant Brands International (TSE:QSR) revealed on Monday that it has started deferring rents for its franchisees. Burger King’s parent company is also helping the operators financially.
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According to the data from the NPD Group, fast-food restaurants recorded a 34% reduction in transactions in the week that ended on 22nd March.
Franchisees To Receive £56.73 Million In Rebates And Cash Advances
Restaurant Brands International statement on Monday also accentuated that it is offering £56.73 million in rebates and cash advances to its North American operators. In an open letter, the company’s chief executive officer, Jose Cil, wrote:
“These initiatives have allowed us to unlock thousands of dollars of immediate liquidity per eligible restaurant.”
In the United States and Canada, Restaurant Brands currently owns 3,700 franchises of Burger King and Tim Hortons. To combat the Coronavirus driven disruptions in business, the landlord has resorted to a novel model that bases an operators’ rent on its sales. The Canadian multinational fast food holding company also deferred rents for 45 days and is in close communication with other landlords in North America for further assistance.
Other franchisors like McDonald’s and Wendy’s have also committed to improving liquidity for franchisees. In a recent announcement, McDonald’s deferred the royalty fee and rent for its franchisees.
Restaurant Brands To Offer Hourly Bonus To Its Workers
Restaurant Brands also highlighted on Monday that it plans on offering a £2.40 hourly bonus to its workers across all three of its brands in April. Its Popeyes and Burger King employees will be eligible for 14 days of paid sick leave in an event that they test positive for COVID-19. The company also worked with its franchisees to create a support fund directed at its Canadian workers at Tim Hortons if they get infected by the virus.
Monday’s announcement also highlighted that Restaurant Brands has distributed 15,000 infrared thermometers at all of its North American subsidiaries to keep its employees checked for COVID-19 symptoms.
After completely drawing down its revolving credit facility worth £810 million, the Canadian multinational currently has around £2 billion in cash.
Restaurant Brands lost less than 1% in the stock market on Monday. Share prices, however, are 37% down year to date.