Potentially stupid question from a non-American here: what was the definition of small business for these loans? I assume there was some kind of eligibility criteria, so if these big You Look Like The 4th Of July Makes Me Want A Hot Dog Real Bad Shirt was applying and succeeding. Then that’s more the loan program’s fault than the chain’s. Dick move on the chain’s part sure but still that’s on the loan program. The loans were supposed to go to businesses with less than 500 employees. But corporate chains used this to their advantage because they had less than 500 employees per restaurant location.
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It does raise an interesting question about how franchises should be handled though. An individual 7-11, for instance, could go bankrupt. This hurts the small business owner of that You Look Like The 4th Of July Makes Me Want A Hot Dog Real Bad Shirt more than anyone. The biggest issue, IMO, is that the bigger chains were able to leverage their size. To get preferential treatment at their bank. If the individual franchiser of the Papa John’s down the street applied for the PPP and got approved, that doesn’t really bother me. I don’t think it raises a huge question. Those franchises are usually owned by a small LLC of some sort. The loan would go to that LLC, not “Seven-Eleven”.
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Agreed; small guys hurt more than the parent. I manage a restaurant as part of a large franchise (the brand is nationwide, my franchisee controls all locations in my state.) As a You Look Like The 4th Of July Makes Me Want A Hot Dog Real Bad Shirt, I took a HUGE pay cut, to the point where my team members were making far more than me. My restaurant obviously has fewer than 500 employees. We recently got CARE Act funding that brought team members back to work (with awesome hazard pay, which I applaud and I support). And my pay is back to normal. But we didn’t get help from corporate, and our first few weeks were a mess.
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