After public blowback, Shake Shack decided to return its $10 million Paycheck Protection Program (PPP) loan. The PPP was intended for small businesses, but a certain exception allows large publicly traded companies, such as Shake Shack, Ruth’s Chris Steakhouse, and J. Alexander’s, to also apply for the loan. According to CNN, these companies received $10 million, $20 million, and $15.1 million, respectively, of the $349 billion stimulus. There are also reports of loopholes in the PPP that allow certain types of businesses to move to the front of the line skipping many small businesses.
Ultimately, we are learning that large publicly traded companies and restaurant chains captured large chunks of the stimulus while many small businesses were left to fend for themselves. Obviously, there is some public outrage and the good will of these large publicly traded companies and restaurant chains is deteriorating.
Shake Shack, however, recognized that the company’s good will is more important than the $10 million PPP loan and decided to return the loan. Shake Shack’s efforts to save and rebuild its good will with the public will also save its trademark. After all, “A trademark has no existence separate from the good will of the product or service it symbolizes.” McCarthy on Trademarks and Unfair Competition § 2:15 (5th ed.).
It will be interesting to see if other large publicly traded companies or restaurant chains follow suit. It will be even more interesting to see if those large publicly traded companies and restaurant chains that keep the PPP loan are able to survive with what will likely be a diminished good will.