Shake Shack CEO Says Restaurant Chain Will Return Its $10 Million Emergency Loan To U.S. Gov’t

Many of Atlanta's local, small restaurant operators were left out in the cold as emergency funds ran dry last week while larger chains racked in the cash.

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Shake Shack’s CEO Randy Garutti and chairman Danny Meyer in an open letter Monday announced the company would be returning a $10 million forgivable loan it received from the U.S. government as part of the Paycheck Protection Program (PPP) which was allocated for small businesses as a means for keeping employees on payroll during the COVID-19 pandemic.

The letter arrives on the heels of growing backlash over the distribution of funds which seemed to favor larger chains like Shake Shack, and as the $349 billion stimulus package, overseen by the Small Business Administration (SBA), ran dry.

“Our people would benefit from a $10 million PPP loan but we’re fortunate to now have access to capital that others do not,” Garutti and Meyer penned.

“Until every restaurant that needs it has had the same opportunity to receive assistance, we’re returning ours.”

Shake Shack, having had to close its dining rooms around the country as mandated by many “stay-at-home” orders in an effort to slow the spread of the virus, saw an “immediate drop in business” that “caused the company to face operating losses of over $1.5 million each week, simply by keeping our doors open with the goal of paying our people and feeding our communities,” according to the letter.

Parent company Union Square Hospitality Group closed all of its New York City-based restaurants on March 13 and with no incoming revenue was “forced to lay off” over 2000 employees.

“If this health crisis and the associated economic shock has taught us anything, it is that we are all in this together,” according to the letter.

“Restaurants and their employees are craving the moment when we can safely be back in business and bring our guests back to the table. With adequate funding and some necessary tweaks, the PPP program can provide the economic spark the entire industry needs to get back in business.”

President Donald Trump and his administration are working on providing additional funding to the PPP, saying on Sunday during The White House’s daily Coronavirus Task Force briefing that a deal between House Democrats and Republicans was close to being reached.

Click here to read Shake Shack’s letter in its entirety.

Shake Shack has four Atlanta locations in Buckhead, Old Fourth Ward, Perimeter Mall, and in the airport, with a location planned for Colony Square.

[Editor’s note: The novel coronavirus (COVID-19) pandemic is rapidly evolving as is its effect on Atlanta, and the City’s businesses and its residents. Click here for What Now Atlanta’s ongoing coverage of the crisis. For guidance and updates on the pandemic, please visit the C.D.C. website.]

Caleb J. Spivak

Caleb J. Spivak

Caleb J. Spivak

Caleb J. Spivak