Burger King U.K. CEO, 100s Of Other Businesses: We’re Not Paying Rent So We Can Pay Our Staff

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Written by Dana Sanchez
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Burger King U.K. and 100s of other businesses say they’re not paying rent so they can pay staff. U.S. landlords have been lost among the calls for action. This Jan. 30, 2018, photo shows a Burger King Whopper meal at a restaurant in Charlotte, N.C. (AP Photo/Chuck Burton)

Governments around the world are coming up with different plans to salvage their economies and support individuals and businesses until the coronavirus is controlled, raising questions about who gets relief, how payouts will be managed, and whether or not it will be fair.

Alasdair Murdoch, CEO of Burger King UK, said that the fast-food chain will not be paying rent due on its restaurant in the U.K., where quarterly rent was due this week.

Hundreds of other firms in U.K. business districts plan to withhold their quarterly rent payments so they can afford to pay their staff, BBC reported.

The U.K. government has said businesses will not forfeit leases if they do not pay, but they will have to pay the rent eventually in the future.

Murdoch in charge of the Burger King UK entity that has exclusive rights to the brand in the U.K. It is responsible for issuing master franchisee licenses and owns and operates 74 restaurants.

U.K. restaurants are allowed to stay open and offer take-out and delivery service, but Murdoch said Burger King decided to close all its U.K. restaurants — about 500 in all.

Landlords told the BBC that they would not evict businesses and that their tenants were looking for different solutions such as rent holidays, monthly payments or to pay no rent at.

Landlords have asked the U.K. government to cover rents. Banks have been told to be supportive as long as landlords act responsibly.

The U.K. has proposed $400 billion in economic stimulus for coronavirus disaster relief, Quartz reported. Government grants will cover 80 percent of the salary of retained workers up to a total of £2,500 a month. The March 17 package also includes a three-month mortgage holiday for homeowners because of the pandemic.

In the U.S., the House and Senate have agreed on a $2 trillion stimulus package that includes $500 billion to back loans for companies and $350 billion for small businesses. Lower- and middle-income adults will get $1,200 and $500 for each child, while unemployment insurance is beefed up.

U.S. landlords and their property interests have been lost among the many “calls for actions to protect vulnerable renters and homeowners from the economic ravages of the pandemic,” CityLab reported.

Rental property owners who can’t collect the rent are still liable for their own bills — not just the mortgage, but utilities, insurance, taxes, and payroll for staff and contractors they employ.

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If landlords are asked to carry the brunt of the pandemic’s blow to the economy, they’ll lay off workers, miss their own obligations, and possibly wind up forfeiting their properties, Kriston Capps wrote for CityLab.

“The bottom line is that if renters are struggling to afford the rent, owners will similarly struggle to not only pay all of their employees, but meet their own mortgage obligations — putting their buildings at risk of foreclosure,” said Jim Lapides, vice president of strategic communications for the National Multifamily Housing Council, a coalition of apartment building owners.

U.S. landlords are overwhelmingly individuals and small business owners — mom-and-pop investors who own two-to-four rental units. Together, they account for nearly three-quarters (74 percent) of all apartment properties, according to HUD and the U.S. Census Bureau.