As its restaurants are shuttered over a lockdown enforced by authorities to keep the coronavirus from spreading, Yum! Brands Inc., the owner of KFC, has reportedly informed landlords in South Africa that it is withholding rent. The policy relates to the just under 50 stores owned by the company in the most industrialized nation in Africa, while the other restaurants on the continent are franchisee-operated Bloomberg reported.
Grant Wheatley, one owner of over 40 KFC shops throughout four African countries, said he is in discussions with landlords, suppliers and banks regarding plans to contend with the situation. Lesotho and Botswana, where Wheatley has locations, have shutdowns put into place, and South Africa has mandated that all eateries close with the inclusion of delivery services.
Wheatley and Yum! Are among retailers throughout the globe who are seeking flexibility from landlords over a time they bring in little or no sales, which makes for a challenging situation for real estate companies and financial institutions. South African attire retailer The Foschini Group Ltd. said per the report that it is halting payments amid the lockdown, and Primark, as well as Hennes & Mauritz AB, are among others to hold back rent.
In separate news, Restaurant Brands International, the parent company of Burger King, will defer rent and boost North American franchisees with extra cash as part of its COVID-19 pandemic response per a report in late March. American fast food restaurant sales have dropped 34 percent compared to 2019, as of the week that concluded March 22.
Restaurant Brands will send $70 million in cash advances, as well as rebates, to franchisees. Rent will now be based on sales made instead of the usual methods and will be put off for 45 days. The firm is also working with North American landlords for more assistance. CEO Jose Cil said per a past report that the initiatives allow the firm to unlock thousands of funds in liquidity for eateries that meet the criteria.