Shake Shack announced Monday morning that it’s returning the $10 million loan it received from the Paycheck Protection Program as part of the $349 billion coronavirus relief package.
The move comes after the PPP, which is overseen by the Small Business Administration, ran out of funds last week. Larger food service operations, such as Shake Shack, faced backlash for receiving sizable PPP loans while smaller, local businesses struggled to secure loans through the program.
In an open letter released Monday, Shake Shack CEO Randy Garutti and chairman Danny Meyer wrote that company decided to return the loan because they are “fortunate to now have access to capital that others do not.”
Garutti and Meyer also criticized the PPP application process in the letter, arguing that many restaurants couldn’t receive funds from the program because applying for it “came with no user manual and it was extremely confusing.”
Garutti also appeared on CNN shortly after the announcement, saying that although the program seemed like a “great opportunity” for restaurants, it “doesn’t seem right to us.”
“As we watched this opportunity play out over the weeks, it was very clear that the program was underfunded and wasn’t set up for everyone to win,” Garutti said.
Garutti added that the company hopes that by returning the $10 million loan, it “can go back into the pot and go to the people that deserve it” as well as “inspire the next round.”
Shake Shack CEO says keeping $10 million PPP loan "doesn't seem right for us" pic.twitter.com/QrNkzbNjz6
— Talking Points Memo (@TPM) April 20, 2020
Treasury Secretary Steven Mnuchin also praised the move in a Monday morning tweet.
I was glad to see that @shakeshack will be returning the #ppploan #CARESAct @SBAgov
— Steven Mnuchin (@stevenmnuchin1) April 20, 2020