How Restaurant Titans Like Shake Shack and Sweetgreen Ended Up With Small-Business Loans

Major restaurant chains like Ruth’s Chris Steakhouse and Potbelly have been publicly excoriated for receiving millions in government loans intended to buoy small businesses during the COVID-19 crisis. But a rule that allowed them to participate in the Paycheck Protection Program, which determined a restaurant’s eligibility based on its number of employees “per physical location,” rather than in total, wasn’t originally introduced by these chains or their lobbying groups, as.

An early draft of the CARES act, which established PPP, would have limited funding to hotel and restaurant groups with 500 or fewer employees total — but it was later amended to allow for larger restaurants to apply, provided they didn’t employ more than 500 workers at any given location. As Colicchio, “We had to explain that yes, a restaurant may have 2,000 employees, maybe spread over 18 restaurants.

The change, which pertains only to the “accommodation and food services sector,” or hotels and restaurants, essentially opened the floodgates to include the industry’s largest players, including publicly traded companies like Shake Shack, which received a $10 million loan it later“When we advocated for that [500 per location rule] on the Senate side, it included a $500 million cap to ensure that the smaller restaurants and businesses could be assured protection,” an IRC spokesperson clarifies.

Loans for locations of Shake Shack, which says it’s losing $1.5 million per week due to COVID-19 closures, wouldn’t necessarily be a problem if funds were unlimited. But the opposite is true: The $350 billion initially invested in the program ran out on April 16, less than two weeks after the program was announced.

It should be up to 500 employees Not 500 employees per location that is just stupid but what do you expect from Congress

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