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Shake Shack returns PPP funds

Provided

April 20, 2020

Although Shake Shack received a $10 million loan from the Paycheck Protection Program, the burger chain is giving it back.

The $349 billion stimulus package ran out of money last week, which sparked resentment over the distribution of funds. Several media outlets, for example, reported that a lot of the money was given to large chain restaurants, hotels and publicly traded corporations instead of small businesses, according to CNN.

The news inspired Shake Shake CEO Randy Garutti and Chairman Danny Meyer to return its funding, stating Monday in an open letter that the PPP had unfairly left out smaller businesses because the program was extremely confusing.

"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 wrote. "We're thankful for that, and we've decided to immediately return the entire $10 million PPP loan we received last week to the SBA so that those restaurants who need it most can get it now."

Garutti and Meyer are also asking the SBA to increase funding to the program and want it to assign a local bank to work with each applicant to ease the process.

President Donald Trump said Sunday that officials were "continuing to negotiate with the Democrats to get our great workers and small businesses all over the country taken care of."

Shake Shack has furloughed or laid off 1,000 employees and cut pay for top executives. It released preliminary first-quarter results Friday showing a 12.8% drop in same-store sales in the quarter, from the year-ago period, as the pandemic led to a steep 28.5% drop in comparative sales during the month of March. 

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