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Burger King boss: We’re not going to pay our rent


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This is a tricky one and the comments pretty much reflect that. Billion dollar company suspending rent after 3 weeks to ‘ensure its can pay staff’. 

No innocence here though.... the landlord could be ‘a small pension’ or it could be a huge pension fund which in turn also make billions. 

Some companies are doing some great things for non financial reasons eg increasing free GB on phones, increasing channels on TVs and locally I have seen some genuine ‘charitable’ use of resources eg sandwich shops delivering bread and eggs etc to those that need it free of charge, loaning out a fleet of cars not in use etc. It might be a big PR ploy but IF they survive this (and some may not) theN hopefully customers will reward the businesses in the future that stood up and did the right thing  

This Burger King example is a bit trickier. Opportunistic? Being careful and managing risk? or just business? Would be great to know that their boss also takes a decent pay cut (even if it’s a loan to the company) so he has enough to survive on...and keep 10 employees in a job. That’s what wins loyalty if done genuinely.  

In the meantime....stay safe, stay inside. 

https://www.bbc.co.uk/news/business-52016263

Edited by Pop321
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I suspect they believe that this won't be over quickly and believe that there will be spread reduction measures in place for 12-18months (e.g. no sitting in cafes /restaurants) and have acted sensibly.

They are effectively taking up the Chancellor's offer:

"The government has said shops will not forfeit leases if they do not pay, but will have to pay arrears in the future"

Firms not paying employees will a have far worse effect on the scale of downturn and recovery than paying rent.

 

Intu are say they received just 29% of rent expected this months vs 77% March last year.

 

Plenty more than BK doing it.

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3 minutes ago, koala_bear said:

I suspect they believe that this won't be over quickly and believe that there will be spread reduction measures in place for 12-18months (e.g. no sitting in cafes /restaurants) and have acted sensibly.

They are effectively taking up the Chancellor's offer:

"The government has said shops will not forfeit leases if they do not pay, but will have to pay arrears in the future"

Firms not paying employees will a have far worse effect on the scale of downturn and recovery than paying rent.

 

Intu are say they received just 29% of rent expected this months vs 77% March last year.

 

Plenty more than BK doing it.

For various reasons, large parts of the UK economy are highly leveraged, low margins, needing to trade like a shark needs to swim.

The clever idea of splitting off real estate, to allow a lot more leverage a la Debenhams is not looking so clever, for either party.

Ditto, having highly leveraged mortgage holds and LLs.

 

 

 

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1 hour ago, interestrateripoff said:

The chain reaction begins?

Force majeure to be applied?  This will reverberate all the way through the financial system.  Hard to know what the final impact could be, anything is a guess.

Zerohedge Retailers stop paying rent

 

Force Majeure has been in full-swing since for a few weeks in CAPEX projects.  Everyone is banging invoices in like there is no tomorrow.  Cash is king and everyone is trying to sit on the largest pile on the other side of armageddon.

We're doing what we can and have a preference of payments during lockdown:

  • One-man-bands who are most as risk get paid first.
  • Larger company payments are on hold until they can prove they are at risk of going under.
  • PLC invoices are not paid, their shareholders are expected to smooth cash-flow.
  • Investment companies and lease holders come last.  This was their business risk and they need to work this problem through with their creditors.

I wouldn't want to be last in this chain.  

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1 hour ago, TopBanana101 said:

Force Majeure has been in full-swing since for a few weeks in CAPEX projects.  Everyone is banging invoices in like there is no tomorrow.  Cash is king and everyone is trying to sit on the largest pile on the other side of armageddon.

We're doing what we can and have a preference of payments during lockdown:

  • One-man-bands who are most as risk get paid first.
  • Larger company payments are on hold until they can prove they are at risk of going under.
  • PLC invoices are not paid, their shareholders are expected to smooth cash-flow.
  • Investment companies and lease holders come last.  This was their business risk and they need to work this problem through with their creditors.

I wouldn't want to be last in this chain.  

Disagree.

The suppliers important to ongoing trading always get paid first.

Financial debt holders are very hi pri- they can repo your business Asap. 

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1 minute ago, spyguy said:

Disagree.

The suppliers important to ongoing trading always get paid first.

Which is what is happening.

 

4 minutes ago, spyguy said:

Financial debt holders are very hi pri- they can repo your business Asap. 

Disagree under Force Majeure 

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4 hours ago, spyguy said:

For various reasons, large parts of the UK economy are highly leveraged, low margins, needing to trade like a shark needs to swim.

The clever idea of splitting off real estate, to allow a lot more leverage a la Debenhams is not looking so clever, for either party.

Ditto, having highly leveraged mortgage holds and LLs.

 

 

 

Be interesting in the pub trade. In Herts we have a family owned chain (McMullens ) 200+ years old. 130 pubs all freehold. Not all great pubs but they can mothball and just start up again. We also have a number of mini chains who lease all their pubs trying to create a 'brand' Peach being one of them £27 million T/O £100k profit - doesn't look too clever now rent holiday or not

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1 hour ago, GregBowman said:

Be interesting in the pub trade. In Herts we have a family owned chain (McMullens ) 200+ years old. 130 pubs all freehold. Not all great pubs but they can mothball and just start up again. We also have a number of mini chains who lease all their pubs trying to create a 'brand' Peach being one of them £27 million T/O £100k profit - doesn't look too clever now rent holiday or not

Pay! Amateurs.

Got to go big or go home in pubs.

https://www.morningadvertiser.co.uk/Article/2019/01/30/How-many-sites-does-Stonegate-Pub-Company-operate

https://www.ft.com/content/382f51ce-a925-11e9-984c-fac8325aaa04



The private equity owner of the Slug and Lettuce chain has acquired the UK’s largest pub operator in a £3bn deal that will increase the size of its estate by more than six times.

Why anyone would buy the **** end of what was left of Enterprise Inns is beyond my reckoning.

Cash flows.... except most EI pubs I walk by have plywood windows.

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  • 417 Brexit, House prices and Summer 2020

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      • up 5%



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