What struck me was that the entire business model is at risk. Seating capacity and price drives the income side, and if seating capacity is cut by a quarter, that is a big hit on the income side.
Totally agree on the leverage angle. landlords are going to take a hit too, as you notice. Vacancies and can’t afford to pay are going up, so landlord cash flow goes down.
And also agree with you, this action is deferred. Courts and lawyers are going to be making out like bandits when the inevitable unravelling is allowed to commence.
Over time are likely to see more and more restaurants go to a “storefront model” that pizza chains like Domino’s and Pizza Hut use in many locations — where there is no sit-down dining at all.
Courts might make out like bandits, but I don’t necessarily think lawyers will. I can easily see a scenario where many of these businesses simply close their doors and don’t even bother dealing with an eviction or foreclosure process. There may hundreds of thousands of these uncontested cases where the defendant doesn’t even have any assets worth liquidating.
One of the impacts could be Contraction in Sports with some franchies unable to survive. Even College Sports may take a hit.