- More than 157,000 people have signed a petition calling for Ruth’s Chris to return $US20 million in Paycheck Protection Program loans intended to support small businesses.
- The steakhouse was granted two $US10 million PPP loans, which it qualified for because of the program’s exception for the restaurant and hotel industries.
- Shake Shack returned a $US10 million loan after significant backlash.
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More than 157,000 people have signed a petition calling for Ruth’s Chris to return $US20 million in loans from a program designed to help small businesses.
Two subsidiaries of Ruth’s Hospitality Group on April 7 were granted $US10 million each in loans from JPMorgan Chase as part of the Paycheck Protection Program intended to support small businesses during the coronavirus pandemic.
While the PPP loans were meant for small businesses, the restaurant and hotel industries successfully lobbied for an exception that allowed any company with less than 500 employees per location to apply for a loan.
Ruth’s Chris, along with chains such as Shake Shack and Potbelly, applied for PPP loans. Seven chains collectively received more than $US90 million. Shake Shack returned its $US10 million loan after backlash, but the other six chains have not done so.
“This is a travesty, and a disgusting display of corporate greed during a time of disaster,” a Change.org petition says. “Tell Ruth’s Chris Steak House ‘Return the money now! You will be shamed forever if you do not. People will not forget.’ Demand that Ruth’s Chris Steak House return the money that it, in effect, stole from actual small businesses across this great country.”
As of 2 p.m. ET on Tuesday, the petition has been signed more than 157,000 times. Ruth’s Chris did not respond to Business Insider’s request for comment.
How chains like Ruth’s Chris got millions of dollars in loans
As a result of the loophole for restaurants and hotels, any company that owns and operates restaurants could qualify for a PPP loan. Even McDonald’s, the biggest fast-food chain in the US, would have qualified – though the company said it would not apply for “assistance from any government entity.”
Shake Shack Chairman Danny Meyer and CEO Randy Garutti said in a LinkedIn post that the PPP loans “came with no user manual and it was extremely confusing.” They said Shake Shack applied for a loan because the company believed the money was the best chance it had to avoid putting people out of work.
Backlash against chains that received PPP loans grew after the $US350 billion allotted for the loans ran out in two weeks, before many small businesses received loans.
Big banks were accused of prioritising companies seeking larger loans that they had preexisting relationships with. For example, JPMorgan committed to giving Ruth’s Chris a $US41.7 million loan on March 30 before granting two subsidiaries of the steakhouse $US10 million each on April 7.
Small-business owners on Sunday sued Bank of America, JPMorgan Chase, US Bank, and Wells Fargo, alleging that the banks favoured companies seeking larger PPP loans. The banks denied the allegations.