Shake Shack, one of several large restaurant chains that got federal loans through the coronavirus stimulus law meant to help small businesses, said Sunday night that it is giving all $10 million back.
The New York-based hipster-favorite burger company is among more than a dozen companies with revenues in the hundreds of millions that are reported to have received money from the Paycheck Protection Program, or PPP, which set aside $349 billion in the stimulus law called the CARES Act to help small businesses keep their workers on the payroll. Less than two weeks after it started, the program has already run out of money.
In a statement Sunday night on LinkedIn, Danny Meyer, Shake Shack’s founder and CEO of its parent company, CEO Union Square Hospitality Group, and Randy Garutti, Shake Shack’s CEO, said the company pursued the loans because the law stipulated that it was open to any restaurant business with no more than 500 employees — which describes Shake Shack’s more than 150 individual U.S. restaurants.
But they said they had no idea that the fund would dry up so quickly, and after they were able to secure separate funding last week, “we’ve decided to immediately return the entire $10 million” so restaurants that “need it most can get it now.”
Baker and Garutti blamed the government for not having planned the rollout more smoothly.
“It’s inexcusable to leave restaurants out because no one told them to get in line by the time the funding dried up,” they wrote. “That unfairly pits restaurants against restaurants.”