Shake Shack, Ruth’s Chris and Potbelly are among the many large restaurant chains that are reaping the benefits of the Paycheck Protection Program made possible by the $2.2 trillion stimulus package passed in Congress last month.
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The Paycheck Protection Program was touted as a lifeline for small businesses, a way for them to stay afloat as the COVID-19 pandemic spurred business shutdowns in every corner of the country. But last week when reports surfaced that the funds for the program were nearly depleted, so did concerns over who the funding went to.
The original stimulus package earmarked $350 billion for small businesses with 500 or fewer employees but allowed hotel and restaurant chains to claim a chunk of that fund as long as they didn’t employ more than 500 people per location. That means restaurants like McDonald’s and Wendy’s, whose drive-throughs have remained open during the pandemic, could compete against small businesses that were completely shuttered during the national emergency.
It also gave way for Ruth’s Hospitality Group, owners of Ruth’s Chris Steak House, to get $20 million in funding through the Paycheck Protection Program. According to the Wall Street Journal, the chain posted a profit of more than $40 million last year. And Shake Shack, which received a $10 million dollar loan but has chosen to return the funds, did close to $600 million in sales last year. Smaller restaurants and businesses, on the other hand, have received nothing.
Earlier this month, more than 5,000 chefs, restaurateurs and food-service workers known collectively as the Independent Restaurant Coalition (IRC) appealed to Congress asking for fixes to the Paycheck Protection Program to allow smaller establishments an opportunity to benefit from the funds. The newly formed coalition also petitioned Congress for more funding for the program. Additional money is said to be allotted as early as this week.
“I’ve heard from plenty of small business owners who say that they’re not getting the help they need,” Senator Cory Booker (D-NJ) tweeted on Monday. “I’m working across the aisle to quickly get more relief to small businesses—including those left out of the Paycheck Protection Program.”
Senator Kamala Harris (D-CA) has also shown concern about the program, specifically the amount of money going toward Black-owned businesses. “We cannot let minority-owned small businesses fall through the cracks of the Paycheck Protection Program,” Harris tweeted on Saturday. “I joined my colleagues this week calling for data transparency on small business loans to make sure that people of color aren’t being shut out from help during a pandemic.
Congress is expected to secure an additional $250 billion for small businesses. No word yet on if the second wave of funding will come with stipulations for restaurants and hotel chains or if Congress is working on an entirely separate stimulus to aid those struggling businesses. According to the Washington Post, more than 70 publicly traded companies have already received funding from the Paycheck Protection Program.