WASHINGTON — Franchises of Subway, McDonald’s, hotel chains, auto dealerships and other big businesses received a total of $15.6 billion from the government’s emergency coronavirus loan program for small businesses, according to data released by the Small Business Administration in response to a Freedom of Information Act lawsuit.

Franchise owners of many of America’s biggest chains took advantage of the Paycheck Protection Program. Among fast-food chains, 4,278 Subways, 2,445 Dunkin’s and 2,217 McDonald’s received funds. Among auto dealerships, 1,478 General Motors locations and 1,115 Ford locations received funds, according to the data, which the SBA released following a federal lawsuit filed by The Washington Post and 10 other news organizations after the SBA refused to release the information after a FOIA request.

In total, SBA identified 75,746 franchise businesses that received loans, amounting to 1.5 percent of the 5.2 million loans issued between April 3 and Aug. 8. The $15.6 billion they received was 3 percent of the more than $522 billion loaned during that period.

Because franchise owners operate somewhat independently of the chains with which they contract, they are eligible to receive PPP funds, money normally reserved for businesses employing fewer than 500 people. The SBA data on franchise affiliations, which the agency had not previously released, shows that loans to franchises saved almost 2.5 million jobs, although experts say the SBA’s estimates of PPP job retention are badly inflated.

Most loans are expected to be forgiven provided that the funds are used properly. SBA representatives did not respond to requests for comment.

Companies including Ruth’s Chris Steakhouse and Shake Shack sparked uproar in the early days of the program when their operating companies received millions of dollars in loans. Dozens of companies, including those two chains, returned the funds. Potbelly Corporation received funds, returned them, and then applied again when Congress replenished the PPP fund.


But for the most part, lawmakers and Trump administration officials did not push back on local or regional franchise owners receiving funds independently. Chains contacted by The Post said franchises and dealers made their own decisions about whether to apply for loans.

All 20,000-plus Subway locations in the United States are independent franchises. Spokeswoman Maggie Truax said that throughout the pandemic “we placed an added emphasis on COVID response and preparedness to help Subway Franchisees navigate this challenging time.”

“This includes providing information from the government on PPP funding, which has been critical to our network of small-business owners who serve and employ people in their communities,” she said.

Of all McDonald’s locations in the U.S., 95 percent are owned by franchisees, according to spokesman Jesse Lewin. He said that “McDonald’s U.S. corporate-owned restaurants did not apply for or receive” PPP funds. McDonald’s also set aside $1 billion at the start of the pandemic to defer rent and royalty payments for franchise owners until business returned.

All Ford dealerships in the U.S. are independently owned and operated. Ford spokesman Said Deep said that Ford made sure dealers were aware of the program but that whether to apply was up to them.

“We informed them on what was available, as we knew it, so they could make their own decisions on whether this was appropriate for their individual businesses,” he said. Spokespersons for General Motors did not respond to requests for comment.


Some small-business advocates and members of Congress however say the amount of money secured by or on behalf of larger companies constituted a major flaw in the program, particularly because chains often have access to capital that independent hotels and restaurants do not.

One such example is Roark Capital. The new SBA data confirms previous reporting by The Post that brands backed by private-equity giant Roark, named for a character in Ayn Rand’s novel “The Fountainhead,” fared particularly well in securing funds, particularly during the highly competitive first round of loans, which ran out in 13 days.

Roark-backed companies franchise a wide array of retail chains. For instance, Roark is a major investor in Inspire Brands, based in Atlanta, which franchises Dunkin’, Sonic Drive-In, Jimmy John’s, Arby’s and other chains.

Neither Roark nor Inspire Brands received PPP loans directly. But companies franchised by Roark’s Inspire Brands received at least 7,439 loans across 34 businesses, for a total of more than $1 billion, receiving larger amounts more quickly than traditional small businesses, according to a Post analysis.

A Roark spokeswoman declined to comment. Inspire Brands spokesman Christopher Fuller said that while Inspire itself did not apply for funds, franchise owners were using it appropriately to preserve jobs and income for employees.

“The program was designed to help independently owned and operated restaurants, whether or not they are affiliated with a broader franchise system,” Fuller said in a statement. “The funds from the program helped restaurants stay economically viable and keep people employed during an incredibly difficult time. We support efforts that benefit independently-owned and operated restaurants, whether or not they are affiliated with a broader franchise system.”


PPP is still broadly viewed as having successfully provided billions in funds to employees of small businesses, staving off deeper economic pain early in the pandemic. Congress and the Trump administration have made a series of changes since the program began last spring in order to ensure that big businesses and Wall Street banks don’t take advantage of the program at the expense of independent small businesses.

A third round of PPP funds totaling $284 billion began Jan. 15, with the program opening initially only to lenders with less than $1 billion in assets under management. Borrowers who received funds from the program previously may receive another round of funds, but borrowers receiving a second loan must have no more than 300 employees.

Another change is that all borrowers this time around must show they experienced a 25 percent or more reduction in revenue in 2020 compared to 2019.

That provision should bar some companies that have fared well during the pandemic, such as fast food restaurants with drive-through lanes, from receiving money while hotels, gyms and other businesses that have suffered steep revenue losses may still be eligible.

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