Shake Shack is giving back its $10 million Paycheck Protection Program loan. Here’s why
Shake Shack executives say they don’t need it, and other restaurants could use it more
In an open letter to the public on Linkedin, Shake Shack founder Danny Meyer and CEO Randy Garutti announced Sunday that the popular restaurant chain would be returning all $10 million it received from the Paycheck Protection Program loan.
“We now know that the first phase of the PPP was underfunded, and many who need it most, haven’t gotten any assistance,” Meyer and Garutti wrote, adding that they would return the $10 million to make sure other in-need businesses get adequate funding.
The pair called for Congress to make sure that “all restaurants no matter their size have equal ability to get back on their feet and hire back their teams.”
The New York-based burger joint touts over 189 locations across the United States. But it was rewarded money through the small-business loan program as part of the CARES Act since none of its individual locations employ more than 500 workers, NBC News reports.
Garutti and Meyer criticized the fact that large chains were receiving big bailouts, while actual small businesses were getting smaller amounts from the program.
“That doesn’t seem right to us,” Garutti told CNN “As we watched this opportunity play out over the weeks, it was very clear that the program was underfunded and wasn’t set up for everyone to win.”
Shake Shack isn’t the only chain getting bailouts meant for small businesses, CNN reports. Kura Sushi, the largest sushi chain in the U.S., has received a PPP loan, Ruth’s Chris steakhouses and J. Alexander’s restaurants, Potbelly Sandwich Shops and others are all among large chains that received multi-million dollar PPP loans while local mom-and-pop shops were left without options.
The United States isn’t the only country receiving large criticism for its small business stimulus programs. Bloomberg reports Italy and the United Kingdom are also struggling to get funds to small business owners and employees, while France and Germany are having more success due to existing infrastructure that helped to smooth the process.