![]() As nearly 90 per cent restaurants in the country operate on premises taken on lease, and given that it's the second-biggest expense at the outlet level, most owners will negotiate a lower rent with landlords. ![]() However, the owners are making plans to minimise costs after they restart. "If there's no government support, 30-40 per cent restaurants may not be able to reopen," he says. Singh, MD, Olive Bar & Kitchen, says the impact of the pandemic is so huge that many restaurants will just fold up, especially in the unorganised segment. "It's early to say this but at least 15 per cent of my restaurants will never reopen," says Priyank Sukhija, CEO and MD, First Fiddle Restaurants. Others will likely report losses, shut shop or shrink their presence. Big players like Jubilant FoodWorks (which operates Domino's Pizza, Dunkin' Donuts and some other brands), which had reserves and surplus of Rs 1,192 crore as on March 2019, might survive. Typically, restaurant ch-ains operate at 5 per cent EBITDA (earnings before interest, taxes, depreciation and amortisation) margins, which are extremely low to weather a crisis of this magnitude. While estimates vary, most industry players are expecting revenues to fall by 50-70 per cent year-on-year for six-nine months after they resume operations. ![]() As per some estimates, most restaurants in India have a cash buffer of 15 days, which they exhausted long ago. ![]() Restaurants are a long-gestation business where corporate-level profits are low," says Rohit Aggarwal, Director, Lite Bite Foods. Much more attention will have to be paid to the issue of building regulations and safety norms, if our cities are to remain viable.Revenues of Lite Bite Foods have fallen sharply, yet the chain has been paying full salaries to its 3,300-strong workforce. From Delhi’s Uphaar tragedy in 1997 to 2017’s Kamala Mills fire, authorities appear to have done nothing in two decades. If Delhi and Mumbai, in terms of regulatory mechanisms, were to be extrapolated to Tier 2 and Tier 3 cities, the scenario appears grim. The responsibility of getting these clearances may lie with the owners of these buildings, but the fact that so many exist and are functioning shows that the system of certification and checks is flawed. The lackadaisical attitude of the administration is revealed by a Comptroller and Auditor General of India report that found that 78% of the budget allocated to buy fire safety equipment and rescue vehicles was unused in Maharashtra between 20. Ensuring that buildings such as educational institutions, commercial complexes, and even housing societies are compliant with fire safety norms is one of the fundamental jobs of an administration. While the blame for this flouting of rules mostly lands on the owners of these buildings, the question of how these buildings became operational in the first place without the complicity of regulatory authorities must also be addressed. A view of the burnt down restaurant at Kamala Mills in Mumbai(PTI) Some have narrow staircases and no proper fire exits, which together could cause a minor accident to become a major disaster. Many shops and restaurants have been found to have changed sanctioned layout plans and increased their Floor Area Ratios. The recent sealing drives in markets that have flouted building norms and regulations are a case in point. After the recent Kamala Mills fire, the issue of fire safety in buildings must be treated with urgency, and not just in Mumbai. This includes not just restaurants and shopping malls, but also educational institutions, housing societies, and commercial complexes. According to the Mumbai Fire Brigade, less than 1% of the nearly three lakh buildings in the city are fire compliant.
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