The famous steak chain restaurant recently came under fire for accepting a small business loan from the government. Several employees, other small businesses and internet sleuths lambasted the chain for accepting it.
Ruth’s Chris Steak House gets $20M in coronavirus relief and I can’t even get the 1K grant. What is up with this system… from r/smallbusiness
You might be wondering what the logic is behind levying so much criticism towards the company during a time of crisis. Well, it goes a little something like this: Ruth’s Chris Steakhouse is a very profitable chain. Matter of fact they haven’t yet posted losses and yet they were laying off/furloughing hundreds of employees.
Despite these details, the restaurant chain chose to use two different subsidiary companies to apply for a government loan. Which meant that not only did they receive the $10 million bailout, but they received it twice.
Things get a little clearer from this side of the fence
So you might be understanding exactly where the criticism was coming from. Because of companies that used subsidiaries to claim small business loans, several corporate chains dried up the relief funds. Meaning, actual family owned small businesses that are being affected could not get anything.
Now, apparently Ruth’s Chris has realized the error of it’s ways and is planning to return the $20 million loan. After news that companies like Shake Shack were returning their loan, it prompted even more outrage.
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Hopefully this trend continues, even if the funds aren’t immediately reallocated. Corporate chains using subsidies to take money away from businesses that need it is problematic.
What do you make of Ruth Chris’ update? Are you surprised or still pretty angry with them? Be sure to let us know in the comments and follow Scoophash for more updates as they come out!
