As a representative body of 5,00,000+ restaurants, NRAI is consistently making efforts to engage with both Central as well as various state governments and other stakeholders for seeking policy and liquidity support for the beleaguered Industry. In its recent endeavour, NRAI has initiated a dialogue with the mall owners across the country, to resolve commercial concerns of the f&b retailers arising out of COVID-19.
NRAI has received several representations from their members requesting intervention in resolving this critical issue. In a note, the association said, “We also feel it is our responsibility as an Industry body to speak on behalf of the fraternity and facilitate such a dialogue for the benefit of everyone in the ecosystem. While we understand that every outlet may have its own individual commercial terms, we have communicated two principal concerns to all malls that need immediate attention.”
The two principal concerns communicated by NRAI are as follows:
• The mandated lockdown has forced us to shut shop and prevent the malls to allow entry to our guests, staff or suppliers. This is a clear case of force majeure and therefore all charges of rentals or CAM for the duration of the lockdown to be waived off entirely.
• The engagement contours in the post-COVID era needs to move towards a totally variable model. Such revenue-share model will ensure that the fortunes of both parties, i.e., the restaurants and the malls are firmly inter-linked. This will ensure that neither parties stand to profiteer at the cost of the other.
Anurag Katriar, President of NRAI said, “While we continue with our advocacy efforts with the Government for strong stimulus packages, NRAI is steadfast in its belief that no business will be able to sustain itself post resumption on older terms of engagement. These are extraordinary times and we need to think anew and think differently with a singular purpose of saving each other, the Industry at large and all the jobs that we have created. You cannot operate on old costs with less than half of older revenue. Therefore, I reckon that revenue share is a very fair model that will ensure that malls don’t lose out if we see an unexpected early surge in business volumes.”
Further he said, “We totally understand that the malls too have huge costs to take care of, which is not easy with reduced cash flows. Unfortunately, this is the stark reality for every business, including ours. In absence of any/less revenue, every business has been compelled to use its reserves or raise capital via debt or equity to fund the losses during this lockdown period. It is no different for malls too, though the announced moratorium on loan repayment surely gives them some respite from cash flow concerns.”
“Our appeal is aimed at playing a constructive role in resolving these issues at the earliest. Most of our members have expressed their unwillingness and inability to restart the business unless these issues get firmly and proactively resolved. There is an overwhelming feeling that it makes better sense to close down now and cut our losses rather than risking massive operating losses in future. This will be most unfortunate for everyone; the business, malls and employees. I am fairly certain that as long-standing business partners of ours, the landlords will extend their support in these times of unprecedented crisis,” he added.
NRAI will soon initiate similar proactive dialogues with other stakeholders such as food service aggregators & individual landlords as well. “NRAI aims to ensure that precious time doesn’t get wasted in resolving these burning issues post-lockdown. We rather have all stakeholders devoting their collective energies in rebuilding this fragile sector that is perhaps one of the most impacted one today,” said NRAI.
