Nathan’s Famous has joined the slew of companies returning small-business loans amid an outcry over big firms getting coronavirus aid.
The storied Coney Island hot dog brand plans to return the $1.2 million loan it received through the Paycheck Protection Program meant to help Main Street merchants cover payroll and other expenses during the pandemic.
In a Monday filing with the Securities and Exchange Commission, Nathan’s said it was granted the loan on April 21, two days before the Trump administration issued guidance saying publicly traded companies with “substantial market value” and access to other financing would be unlikely to qualify for so-called PPP loans.
The Long Island-based company with a market value of $253 million said it decided to return the money in light of that guidance, which urged public firms to repay their loans by May 7.
Nathan’s had 149 employees and more than 250 restaurants as of March 2019, according to its most recent annual report. Most of its franchised eateries have temporarily closed because of the coronavirus pandemic and its branded product sales have suffered from closures of venues where they’re offered, such as movie theaters and amusement parks, the company said.
But Nathan’s saw a significant increase in royalties from license agreements last month thanks to a spike in sales of packaged goods at grocery stores, according to the SEC filing.
“We are principally focused on the well-being and safety of our guests, franchisees, restaurant associates and all other employees,” Nathan’s said in the filing. “Since the situation around the COVID-19 virus is constantly changing, we may implement additional measures to ensure the safety of our team members and guests over time.”
Nathan’s is among at least 17 public companies that have pledged to return more than $195 million in so-called PPP loans amid a growing furor over who has benefitted from the $659 billion loan program.
At least 248 public companies in all had disclosed receiving some $905 million in loans as of Tuesday morning, according to SEC filings compiled by data-analysis firm FactSquared. Several firms with thousands of employees snagged loans before the program’s initial $349 billion budget ran out while many smaller businesses were left out in the cold.