Shake Shack sends its coronavirus relief loan back to the kitchen

The burger chain extinguished the PR flames, but other big businesses might take a turn on the grill.


April 21, 2020

Last week, we learned that a big burger chain and a meaty brand of steakhouses had nabbed some of the government’s coronavirus relief money for small businesses.

To critics, the revelations were red meat — shouldn’t the money go to businesses that are actually, y’know, small?

So on Monday, the bougie bovine specialists at Shake Shack changed their minds.

Don’t beef with us

The company, which operates ~189 restaurants in the US and reported almost $600m in revenue last year, received $10m of the $349B in the Small Business Administration’s coronavirus relief funds.

In a blog post, Danny Meyer and Randy Garutti, the Shack’s founder and CEO, said the loan program “came with no user manual and it was extremely confusing.”

They’re giving the corona cash back. And they’re very sorry for swiping the little guy’s french fries.

Will other big businesses follow?

Shake Shack’s decision to return the money won’t come close to overcooking the company’s finances. It raised $150m in an equity offering last week.

The company’s move to extinguish the PR flames means the smoke in its kitchen is clearing. But people are licking their chops to give other chains a turn or 2 on the grill.

They took advantage of a provision in the coronavirus relief package that let them seek loans for different subsidiaries.

  • Ruth’s Chris Steak House, which has 150 locations and is valued at $250m, pocketed $20m — the same amount as the Brazilian steakhouse chain Fogo de Chão.
  • J. Alexander’s Holdings, a casual-dining company, took in $15.1m.
  • In all, Forbes tallied 71 publicly traded companies that received money under the Paycheck Protection Program (PPP) — for a total of $300m, or 0.09% of the total funding that was distributed.

Meanwhile, the little guys are awaiting their 1st helping

Congress is still hammering out the details of a 2nd infusion of cash for the PPP, which could add another $300B+ to the fund.

Tell us: Are you a small-business owner who had a PPP loan request denied? We’d like to hear from you. Please fill out our form here.

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