Backlash continues to grow after large businesses like Ruth’s Chris, Shake Shack and Wendy’s received loans intended for small businesses. Now, at least one of those companies is issuing a mea culpa of sorts.
Danny Meyer, Founder of Shake Shack and Randy Garutti, the company’s CEO released a statement saying, “we’ve decided to immediately return the entire $10 million PPP loan we received last week to the SBA so that those restaurants who need it most can get it now.”
They go on to say their decision to apply for the loan at all was “complicated” and suggest they also truly throught they were eligible.
The “PPP” came with no user manual and it was extremely confusing. Both Shake Shack (a company with 189 restaurants in the U.S., employing nearly 8,000 team members) and Union Square Hospitality Group (with over 2,000 employees) arrived at a similar conclusion. The best chance of keeping our teams working, off the unemployment line and hiring back our furloughed and laid off employees, would be to apply now and hope things would be clarified in time.
As they learned that while they did receive the loan “PPP had been exhausted” they admit they began to question “how is it possible that so many independent restaurants whose employees needed just as much help were unable to receive funding?”
In the meantime, they point out “Shake Shack was fortunate last Friday to be able to access the additional capital we needed to ensure our long term stability through an equity transaction in the public markets.” All that seemed to play into their decision to return the money.
No word on whether other large corporations will do the same.