The widespread condemnation of these loans is righteous, understandable, and completely misplaced. First, these companies legally qualify for the PPP given the state of their industry—the utterly obliterated restaurant sector—and the franchise-based nature of their businesses. Second, they employ a lot of people. One cannot simultaneously mourn the loss of millions of jobs while tsk-tsking companies that use every means available to stave off a bankruptcy that will end with mass layoffs.
The PPP’s original sin was not that it was available to franchises, but that it was way too small to serve all qualifying businesses. Congress thus turned a purported bailout program into a battle royale over funds, which meant that every dollar Shake Shack secured to spare its own employees was a dollar denied to a small suburban diner’s waitstaff. (The low dollar amount wasn’t the PPP’s only problem: By making loan forgiveness contingent on payroll maintenance, it left a sizable coverage gap for the worst-hit companies that had already laid off workers.)
Industry titans are joining the corporate blame game.