Coronavirus Lockdown: Tata Starbucks Seeks Three Months Rent Waiver From Landlords; May Invoke ‘Force Majeure’ Clause

Amid the nation-wide lockdown imposed to contain the deadly novel coronavirus, Tata Startbucks has requested landlords of its 185 outlets for three-months of rent waiver, reports Economic Times.

It should be noted that several restaurant chains including McDonald's, Jubilant FoodWorks-operated Domino's Pizza and Speciality Restaurants have sought similar waiver from landlords and mall owners, states the report.

In the letter Tata Starbucks said that they would be unable to bear rental and maintenance charges and asked for the waiver from 1 March.

“The only way to survive this crisis is by drastically reducing our fixed operating expenses in the immediate term till the consumption in the sector improves,” the letter further read.

The ET report further states the coffee chain giant as saying that the future term could be mutually decided depending upon any improvement.

Experts are of the opinion that if the landlords disagree, Tata Starbucks may invoke ‘force majeure’ clauses as some other restaurant chains, retailers, and multiplexes have done.

The ‘force majeure’ clause prevent businesses from fulfilling a contract in case of rare and unanticipated events that are beyond the control of the party.