Shake Shack CEO Randy Garutti and founder Danny Meyer announced on Monday that their company will be sending back the $10 million it received from the Trump administration as part of the coronavirus-related economic relief.
The money was included in a $2.2 trillion spending package, signed into law by President Trump, that aids small businesses and others who have a loss of income during the coronavirus pandemic.
“Low-paid workers in the retail, restaurant, and hotel industries have been among the hardest-hit by the coronavirus pandemic,” Reuters reports. “Of the $342 billion small business bailout fund, the combined industry was allocated 18% of the total fund.”
In a blog post, the chief executives said they would prefer the money be reallocated to other restaurants that have a greater need for it; those “who need it most, (and) haven’t gotten any assistance.”
“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,” the duo said in the post via Axios.
“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,” they continued.
“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,” they concluded.
The company runs around 189 restaurants in the United States, with about 45 employees in each outlet, and reported nearly $600 million in revenue for 2019.
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It has closed about half of its 120 locations worldwide, and furloughed or laid off more than 1,000 employees after sales fell 28.5% in March, the company said in a filing on April 17.
The decision to return the funds also comes as the $350 billion initially allocated in the Paycheck Protection Program is running out.
Members of Congress are still debating how they will fill the depleting funds.