McDonald's is considering deferring rent for franchisees as restaurants around the world close to in-store dining as part of efforts to contain the spread of COVID-19.
In a regulatory filing Tuesday, the Chicago-based fast food giant said it is "working with franchisees around the world in order to evaluate operational feasibility and support financial liquidity (e.g., rent deferrals) during this period of uncertainty." The company also said it is working with suppliers to ensure continuous supply.
McDonald's announced Monday night that all company-owned stores in the U.S. would be available only for drive-thru, takeout and delivery, and it urged franchisees to adopt similar measures. More than 90% of its 14,000 U.S. restaurants are franchises.
The day before, Illinois' governor mandated all bars and restaurants close to in-person dining until the end of March, as numerous states and cities have done to discourage people from congregating.
In most of the company's international markets, restaurants are closed to in-store dining and in some, such as Italy and Spain, they are closed outright. Nearly all restaurants in Japan are open and 95% of those in China, the first country to be hit with the new coronavirus, are now operating normally.
McDonald's, which has nearly 38,000 restaurants globally, said the financial impact of the coronavirus on its business cannot be predicted. It expects to provide an update at its first quarter earnings call April 22.
Activists have called on the world's largest burger giant to provide paid sick leave and layoff protections to its hourly workers during the emergency. McDonald's has said its corporate-owned restaurants will offer up to 14 days of paid leave for employees who are diagnosed with COVID-19 or forced to quarantine.
