The National Restaurant Association of India (NRAI) wrote an open letter to landlords to waive off rentals and common area maintenance charges for relief as most restaurants have been shut or have had to incur huge losses due to the lockdown.
In a release, the NRAI said that restaurants are fighting a battle for existence and to avoid job losses, and that it will take them many months post lockdown to become sustainable again. “To achieve these twin objectives, we need to somehow bring down our fixed operating costs and its ratio; there is no other way out and the biggest components of these fixed operating costs are Rentals and Manpower expenses,” they said.
To achieve this, it has appealed to landlords, both mall owners as well as independent owners to waive rentals and common area maintenance charges for three months, as well as a revenue-sharing model post the three months for a period of six months.
In an open letter to landlords, NRAI proposed that rentals and CAM must be waived off from March 15 to June, or till whenever the business lockdown is in place, whichever is later, along with a waiver of minimum guaranteed rents for six months once they are back in business.
“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% of the agreed terms with possibly a maximum cap at 10%,” the NRAI wrote.
It also asked for CAM charges to be rationalised, and for charges to be levied at half the agreed rate.
In addition to this, the NRAI said it was grateful to the government for the measures it put in place recently, but would require additional help.
“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!,” Katriar said.
The RBI last week permitted banks to give a three-month moratorium on all term loans. These will have to be approved by the boards of the respective banks.
It also appealed for the restoration of input tax credit on GST.