Big restaurant chains like Ruth’s Chris Steakhouse, Potbelly and Shake Shack have faced criticism for receiving millions of dollars in government loans from the fund intended for small businesses during the COVID-19 relief, thanks to language in the CARES Act that allows restaurants with no more than 500 employees “per physical location” rather than in total to apply.
And as a new Eater report points out, that language is the result of lobbying from the Independent Restaurant Coalition, a new trade group co-founded by the likes of Tom Colicchio, Naomi Pomeroy, Kwame Onwuachi and José Andrés.
“We had to explain that yes, a restaurant may have 2,000 employees, maybe spread over 18 restaurants,” Colicchio told the publication. “And so we lobbied to look at the individual restaurant numbers, as opposed to the whole enterprise.”
However, the IRC claims it never intended for large, multimillion-dollar chains to have access to the money set aside for small businesses.
“When we advocated for that [500 per location rule] on the Senate side, it included a $500 million cap to ensure that the smaller restaurants and businesses could be assured protection,” an IRC spokesperson told Eater. “Unfortunately, it was removed in the House and not included in the final package. Most small restaurants didn’t get funding because Congress made PPP so broad that businesses took funds whether they have been hurt by this crisis or not.”
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