NRAI seeks support from landlords in F&B sector to tide over impact of COVID-19 outbreak
"Due to the outbreak of COVID-19 and the subsequent lockdown announced by the govt, our industry is going through an unprecedented crisis that threatens our very existence. We are fighting a very grim battle for our survival and we seek your immediate support," the National Restaurant Association of India (NRAI) said in an open letter to the landlords in F&B business.
As long standing business partners, the restaurant industry seeks your urgent help and support in these troubled times, it added.
"While this shutdown may continue for a month or two, we will take many more months post that to get back on our feet and we will not be able to sail through this period smoothly without your support," the letter said.
The restaurant industry truly appreciates the fact that some of the landlords have already offered suo-moto interim support. It sincerely requests all others to join in as well in this time of need, it added.
NRAI proposed interim measures to the landlords such as "a complete waiver of rentals and CAM for a period starting 15th March-2020 up to June-2020 or till such time that the business lockdown continues, whichever is later".
It requested them to waive off minimum guaranteed rents for a period of six months post resumption so that businesses can eke a survival to fight another day.
"We instead propose working on a pure revenue share model for a period of six months post resumption. We further propose revenue share equivalent to 50 per cent of the agreed terms with possibly a maximum cap at 10 per cent. We also request rationalising CAM during this period and levy charges at 50 per cent of the agreed rate," the letter said.
The restaurant industry is seeking these reliefs just for ensuring that businesses don't die an instant death, leaving behind a trail of unfulfilled dreams, millions of lost jobs and massive unwanted litigation, it added.
"..., we assure you that we are willing to walk together with you through these unprecedented challenging times with all resources at our command and we request a similar support from you," the letter said.
As an industry, "our business model is such that the proportion of fixed operating expenses is very high, which is very high-risk model. Now, with the prospect of zero revenues staring at us for a substantial period of time, our fight is now a battle to retain our mere existence as commercial entities that provides jobs to millions", NRAI said in the statement.
While thanking the government and RBI for their recent measures aimed at mitigating some of the woes of the industry, NRAI again requested the government to restore input tax credit on GST as it will also help significantly in bringing down the fixed operating costs.
"The recent measures partially resolve our immediate concern of keeping the kitchen fires in the homes of our employees burning, which looked very difficult earlier with our negligible to limited cash reserves. Moratorium on EMI will also help millions of employees in the sector, who all have availed some loan or the other and have an EMI to honour every month.
"These are very brave and laudable measures in the immediate term and we welcome them wholeheartedly. We will need a much bigger stimulus package from the govt whenever we get back to the stage of rebooting our business," NRAI President Anurag Katriar said.
The National Restaurant Association of India (NRAI) represents the interests of over 5,00,000 restaurants. AKT RVK