Shake Shack, nationwide restaurant chain with over 149 locations, received $10 million in federal loans that were made available to small businesses as part of the COVID-19 stimulus.
The fund, again meant to help out small business, has already been depleted, and now Shake Shack is giving the money back.
via Complex:
Shake Shack founder and Union Square Hospitality Group CEO Danny Meyer and Shake Shack CEO Randy Garutti explained the move in a lengthy LinkedIn post over the weekend, stating that the terms of the since-dried-up Paycheck Protection Program (PPP) were “confusing” and that the company was not aware that funds would be exhausted so quickly. After securing separate funding, the company was inspired to give its loan back so smaller businesses may have access to the funds.
“Late last week, when it was announced that funding for the PPP had been exhausted, businesses across the country were understandably up in arms,” Garutti and Meyer said Sunday. “If this act were written for small businesses, how is it possible that so many independent restaurants whose employees needed just as much help were unable to receive funding? We now know that the first phase of the PPP was underfunded, and many who need it most, haven’t gotten any assistance.”
The two also shared what they consider helpful tips on how to make PPP work better in the future, as well as urged Congress to make certain that “all restaurants no matter their size” have equal footing amid COVID-19 containment efforts.
“Our people would benefit from a $10 million PPP loan but we’re fortunate to now have access to capital that others do not,” Garutti and Meyer said. “Until every restaurant that needs it has had the same opportunity to receive assistance, we’re returning ours.”
While the move itself has been commended, many have also been quick to offer reminders that Shake Shack arguably only made such a move after being roundly criticized for accepting the money in the first place.
Let’s see if other restaurants who don’t need the money will follow-suit.
