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Shake Shack Is Returning Its $10 Million Bailout Check After Criticism

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Apr 20 '20 | By entertainoiam2admin | Views: 19 | Comments: 0
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The first major bailout of small American businesses, part of the CARES Act, has already exhausted its budget. Although there was $350 billion in PPP (Paycheck Protection Program) allocated for small businesses, it ran out within minutes. It’s now becoming clear who received the lion’s share of that money — large businesses with multiple properties received their stimulus checks right away while actual small businesses and restaurants have received little to nothing.

International and publically traded burger chain Shake Shack received $10 million in aid from the program. Now it seems, due to the continued backlash to the program, they’ve decided to return that check. Shake Shack’s founder and chairman, Danny Meyer, and the company’s CEO, Randy Garutti, released a joint statement via LinkedIn addressing the issue. The gist of the statement is that the loan parameters were “extremely confusing” and they thought they could be included because their individual restaurants employ “roughly 45 employees per restaurant,” according to their statement.

The employee stipulation for applying was “any restaurant business — including restaurant chains — with no more than 500 employees per location would be eligible,” according to Shake Shack’s letter. This was enough for them to apply for a relief loan and they got it. But considering that Shake Shack is a non-franchise business that employs 8,000 people and just last Friday said they’d be able “raise up to $75 million from investors by selling shares,” it’s questionable why they applied in the first place.

We will be returning our Paycheck Protection Program loan. More information from our founder @dhmeyer + CEO @randygarutti here: https://t.co/gXNsO1RfKf pic.twitter.com/tMtVNlY6ou

— SHAKE SHACK (@shakeshack) April 20, 2020

Shake Shack isn’t the only big name in the restaurant business — or any business for that matter — collecting checks meant for small businesses right now. Bloomberg has reported a long list of companies with employee counts in the thousands with hundreds of millions in yearly revenues receiving PPP checks that were supposedly earmarked for small businesses. One major issue is that the restaurant business isn’t a “single” entity. Different sectors are going to have different needs based on being publically traded like Shake Shack or being franchised chains like Ruth’s Chris or being fully independent/ local operations. The latter category is where many believed the package would be targeted.

Overall, a lot of this comes down to people simply not understanding how the money was going to be distributed and not having the lawyers and lobbyists in place to make sense of these things sooner. Meanwhile, with the money gone, Congress and the White House have gone back into meetings to shore up the program and inject an additional $250 billion into the relief fund.

(Via Bloomberg)

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Source: https://uproxx.com/culture/shake-shack-bail-out-check-return/

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