Funding runs dry for small business, but chain borrowers argue their restaurants count too
April 23, 2020 at 5 p.m. EST: Ruth's Chris Hospitality Group has just announced plans to return the $20 million loans from the Paycheck Protection Program. The Change.org petition recieved over 250,000 signatures.
April 23, 2020: This story has been updated with additional chains that have since announced they recieved loans and/or returned them including Sweetgreen, Kura Sushi, Rave Restaurant Group and Meritage Hospitality Group.
When the Paycheck Protection Program, or PPP, launched on April 3, the race was on to secure a piece of the $349 billion in economic relief set aside for small businesses as part of the $2 trillion Coronavirus Aid, Relief and Economic Security, or CARES Act.
Though the forgivable loan program was designed for businesses with 500 or fewer workers, restaurant and hotel operators could apply if they have 500 or fewer at any one location. The goal was to allow franchisees and small chains to apply with the argument that preserving those jobs are also vital to local economies.
Within less than two weeks, the PPP ran out of money, leaving many small businesses out of luck.
Those who were able to secure loans, however, included several large restaurant chains, which caused an uproar. Earlier this week Shake Shack made headlines when CEO Randy Garutti announced the company would be returning the loan. On April 23, Sweetgreen founders announced they would return their own $10 million loan from the PPP in a Medium post to their comminuty.
Ruth’s Chris Hospitality Group received $20 million in PPP loan money, one for each of two subsidiaries. The news prompted a Change.org petition calling on the steakhouse chain to also return the funding.
The privately-owned Brazilian steakhouse chain Fogo de Chao also won $20 million in PPP loans.
“The scale of our business doesn’t matter,” Barry McGowan, CEO of Fogo de Chao, told the Wall Street Journal “All of our restaurants count.”
Lawmakers, meanwhile, appear to have reach an agreement on adding more funding to the program. Early reports indicate specific funding will be set aside for small, minority owned and rural businesses.
See the ten major restaurant groups that received PPP loans and their most recent financial statements.
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