The National Restaurant Association of India (NRAI) on Friday has shot off letters to all the leading mall owners and landlords urging them to tweak rental agreements to support the industry as it faces restrictions on operations across States due to rising Covid cases amidst the Omicron-led wave.

The industry body said that the restaurant sector is burdened with massive losses of the last year and the third wave comes as “a body blow” that many will not be able to withstand unless actively supported by all stakeholders.

Kabir Suri, President, NRAI said, “Unfortunately, the ongoing third wave has brought us to exactly where we were the same time last year. To aggravate the problem, businesses have much depleted resources now, making the situation grimmer. We need support from all stakeholders once again to survive and we are sure that we will get their support as always. While we are not aware how long this third wave and consequent restrictions (occupancy/timing restrictions, curfew) will remain in place, we are certain that the business will take some time to normalise once we are out of the grip of this third wave.”

The industry body said landlord and mall owners should offer complete waiver of rentals in case restaurants are asked to completely shut down dine-in services. In addition, it has urged malls and landlords to work on pure-revenue-share model for the period that the industry faces restrictions such as delivery only, limited hours of operations and limited capacity utilisation.

Common Area Maintenance charges

“No minimum guaranteed rents for three months post that and instead work on a pure revenue-share model. For stores with a longer past occupancy record, this revenue share may alternatively be linked to their sale as a percentage to their past period sale. CAM (Common Area Maintenance) charges during this period of restrictions should be be maintained at 50 per cent of the agreed rate,” it has recommended.

“While the first two waves of pandemic crippled us badly and resource crunch forced many restaurants to shut down, we see a larger concern with this third wave as it may actually hurt consumer sentiments in the near term which is already visible. With high fixed overheads, expected restrictions on operating hours, revised social distancing norms and reduced capacity utilization, any drop in consumer sentiments can be catastrophic for the sector. We surely have a grim battle at hand and the most potent tool to fight this is to redefine our relationship and business model,” added Suri.

NRAI has written individually to all prominent mall owners and an open letter to other landlords suggesting these immediate measures due to uncertainties. It said it has received several representations from its members requesting for intervention in resolving issues around commercial terms.

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