Restaurant Brands International, parent to the Burger King, Tim Hortons and Popeyes brands, outlined a number of initiatives it was implementing in the wake of the coronavirus pandemic, including offering 14 days of paid sick leave for workers in company-owned locations diagnosed with COVID-19 or deemed in need of isolation, and advancing cash payments and rebates to restaurant owners.
Jose Cil, CEO of the Toronto-based quick-service company, said in an open letter Monday: “Our business model has allowed us to maintain a strong balance sheet and we ended 2019 with about $1.5 billion in cash.”
Cil said the company had drawn down another $1 billion from its revolving credit facility. “As a result, we now have approximately $2.5 billion of cash on hand,” he said.
“This has provided us the flexibility to confidently support our restaurant owners and employees throughout this uncertain time and maintain our focus on supporting our brands for the long term by making the right decisions today,” Cil wrote.
Among the initiatives that RBI is taking:
Sick leave at company-owned restaurants: At Burger King and Popeyes in North America, the company is providing paid sick leave for up to 14 days to workers in corporate-owned restaurants who have been diagnosed with COVID-19 or have been asked by the restaurant manager or a medical professional to self-isolate. “We have also encouraged our restaurant owners to use this difficult time to invest in their team members for the long term and have been heartened to see so many do so,” Cil said.
In-store safety, including thermometers: Cil said the company has “implemented comprehensive social-distancing procedures for team members” and was in the process of sending 15,000 infrared thermometers to all Burger King, Tim Hortons and Popeyes restaurants “to confirm that team members are healthy as they arrive for shifts,” Cil said.
Employee support fund: At Tim Hortons in Canada, RBI has partnered with its restaurant owners to establish a $40 million (in Canadian dollars) employee-support fund to continue paying team members affected by COVID-19 for up to 14 days if they need to home.
Special bonus: The company will pay a special bonus in April to corporate restaurant team members in North America “across our three brands to recognize their tremendous service to our guests and communities during this difficult time.”
Support of franchisees: In many markets, including North America, Cil said the company is “advancing cash payments and rebates to restaurant owners so that they have this much needed cash when they need it the most—right now. In North America, this represents approximately $70 million (in U.S. dollars) of available cash advances. Cil said, “We are continuing to look for other payments due to restaurant owners later in the year that can be advanced now. These initiatives have allowed us to unlock thousands of dollars of immediate liquidity per eligible restaurant.”
Rent structures: At about 3,700 locations of Tim Hortons in Canada and Burger King in the United States and Canada, “we have temporarily converted our rent structure from a combination of fixed plus variable rent to 100% variable rent, which provides relief in the face of declining sales,” Cil said. “In addition, we have deferred rent payments for up to 45 days to provide tens of millions of dollars in much-needed working capital to our systems. We are also contacting all of our landlords in North America to seek further assistance that will be passed along to our restaurant owners as we receive it.”
Capital expenditures: RBI is pausing obligations for remodeling programs “until we have greater visibility into the severity and duration of this crisis, which will create significant relief on our restaurant owners' cash flow,” Cil said.
Liquidity Support: Cil said RBI has established “Restaurant Owner Liquidity Support Teams” in all three of its brands to work with restaurant owners and deal with government backed stimulus programs.
For the fourth quarter ended Dec. 31, Restaurant Brands International reported revenue of $1.48 billion and income of $257 million, or 54 cents per share, down from $301 million, or 64 cents per share, a year earlier.
RBI owns and franchises more than 27,000 restaurants in more than 100 countries.
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