“SHOKOLADNITSA” RESTAURANT CHAIN IS CLOSING 140 RESTAURANTS ON THE TERRITORY OF RUSSIA

The “Shokoladnitsa” restaurant chain is going to permanently close almost half of its restaurants. This is the information, confirmed by Oleg Podgorny, the CEO of the company.  The speech is about the restaurants, located in big shopping centers.  However, those restaurants of the “Shokoladnitsa” group mights be closed, in which the management failed to reach a compromise with the lessors and receive any benefits for paying the rent.

We should recall that “Shokoladnitsa” appeared in the early 2000s.  The prototype for business model was the famous cafe with similar name, which existed in Moscow from the mid 60-ies of the last century.  In addition to the “Shokoladnitsa” chain, the group of companies operates the “Coffee House” and “Wabi Sabi” restaurants as well.

It is worth noting that the process of reducing the presence of “Shokoladnitsa” in the market has begun even before the pandemic.  November 2019 was the last working month for almost 50 restaurants, while it was planned to optimize the work of about 30 more outlets.  But the crisis, the restrictions on the visiting the restaurants, introduced by the authorities, as well as the fear of visiting crowded places, have made their own adjustments.

As a result, the network plans to “reboot”, and start the online business anew. According to the CEO, no new restaurants will be opened for the “Shokoladnitsa” chain in the next two years.

Oleg Podgorny provides the statistics on the loyalty of the property owners to their tenants on the example of “Shokoladnitsa “. 45% of the owners turned out to be tolerant and cooperative and offered the restaurants the discounts on the rent, on average about 40% of the previous price.  A number of lessors proposed another scenario - they agreed on the zero rates for April (when restaurants are actually closed), and with some of them the management agreed even for May. According to Oleg Podgorny, 10% of the owners completely ignored the requests of the restaurants chain and did not contact with its management at all.

It should be noted that in the most of the restaurants that were closed under conditions of self-isolation, but got the opportunity to work in the "take-away" mode or by pre-order with delivery, the expenses are excessive and are not covered by delivery.  The experts predict that about 90% of the restaurateurs will not be able to restart the business even after the abolition of the emergency and the administrative regime, established by the state.

When it comes to “Shokoladnitsa” restaurants, 61 of them are currently operating in the take-away mode. The most optimistic scenario involves the resumption of work not earlier than in July 2020.

As a franchisee, the organization also engaged in the development of KFC, Pizza Hut, and Panda Express networks.  Whether the main owner of the company Alexander Kolobov will continue to work in the previous format, is still unknown. How much the reduction in the number of working outlets will affect those networks, with which the group works under the commercial concession agreements, is unknown as well.