Kura Sushi has become the latest chain restaurant to return funds it received through the Paycheck Protection Program (PPP), saying it had decided smaller businesses needed the money more.
President and CEO Jimmy Uba said in a statement on the company’s website that the sushi chain will return the $5.98 million loan.
“This was a difficult decision because our employees are extremely important to us, but it’s impossible to ignore the fact that our finances allow us to weather financial hardship for a longer period than independent restaurant owners,” Uba said. “We hope that these funds will be shared equitably among deserving candidates.”
The Irvine, Calif.-based chain, which closed its more than 400 U.S. locations March 18 with no takeout or delivery options, is worth $88 million, according to The Washington Post.
Uba said the company interpreted an exemption in the CARES Act from typical Small Business Administration criteria for accommodation and food services as “a deliberate effort by lawmakers to further support the restaurant industry, whether you have one or multiple restaurants,” he wrote.
“With the Paycheck Protection Program, we assumed all restaurant employees would be able to continue being paid, regardless of where they worked, and that the funds would be enough for everyone. This was a wrong assumption,” he added.
The popular small-business loan program, which is intended to help companies with fewer than 500 employees keep workers on their payroll and keep the business running, was funded at $349 billion in the $2.2 trillion coronavirus relief bill passed late last month. It ran out of money last week. The Senate passed a bill to refill its coffers this week, and the House is set to vote on the measure Thursday.
Kura Sushi’s decision follows a similar one by Shake Shack, which received a $10 million loan but said the terms of the CARES Act were “extremely confusing” and that it did not realize the federal funds, which ran dry last week before congressional leaders reached a deal for another round of funding, would be exhausted so quickly.
Senate Finance Committee Chairman Chuck GrassleyChuck GrassleyGrassley calls for federal prosecutor to probe botched FBI Nassar investigation Woman allegedly abused by Nassar after he was reported to FBI: 'I should not be here' Democrat rips Justice for not appearing at US gymnastics hearing MORE (R-Iowa) said Tuesday that chains like Shake Shack and Ruth’s Chris Steak House, which received $20 million, should not have received such loans.
“They should not have gotten it because they had more than 500 employees. They could have legitimately got some help from another government program,” Grassley told C-SPAN. “They should have gone to the Federal Reserve to get it, and not got it from the small-business program.”