Shake Shack returning entire $10 million PPP loan
Customers wait for to-go orders outside Shake Shack in Miami Beach, Florida, on Saturday. Photo: Cliff Hawkins/Getty Images
Shake Shack will return its entire $10 million Paycheck Protection Program loan from the federal government that it received as part of the coronavirus stimulus bill, the burger chain's leaders said in a LinkedIn post Sunday night.
Why it matters: The New York-based firm was among several restaurant chains to attract criticism for taking the loan, designed to protect small businesses from the fallout of lockdowns and other restrictions aimed at curbing the spread of COVID-19.
- The $349 billion cap for small business loans for the coronavirus stimulus was reached last Thursday.
What they're saying: "The "PPP" came with no user manual and it was extremely confusing," said Danny Meyer, Shake Shack's founder and CEO of its parent company, Union Square Hospitality Group, and Shake Shack CEO Randy Garutti in the statement.
- "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," they continued.
- "We're thankful for that and we've decided to immediately return the entire $10 million PPP loan we received ... so that those restaurants who need it most can get it now."
"We now know that the first phase of the PPP was underfunded, and many who need it most, haven't gotten any assistance. ... Our people would benefit from a $10 million PPP loan but we’re fortunate to now have access to capital that others do not. Until every restaurant that needs it has had the same opportunity to receive assistance, we're returning ours."
What he's saying: When asked about big publicly traded firms being deemed eligible for PPP funds, President Trump noted at Sunday's briefing that "a lot of times they’re owned by franchisees, where they own one or two places, so a lot of that would depend on what the formula is."
Go deeper: Shake Shack founder Danny Meyer discusses the decision on Axios Pro Rata Podcast