GRAND RAPIDS, Mich. (WOOD) — A Grand Rapids-based restaurant company is one of the big businesses that received millions from a federal loan program meant to help small businesses weather closures aimed at slowing the spread of coronavirus.
Meritage Hospitality Group Inc., which owns Wendy’s franchises, Twisted Rooster and other restaurants, was given $29.1 million from the Paycheck Protection Program.
Meritage CEO Robert Schermer Jr. refused an interview with News 8 Wednesday. Instead, a spokesperson sent a statement saying, in part, that the loans are needed to pay employees amid a “significant downturn in business while restaurants and dining rooms remain closed…”
The company said it was taking “significant proactive measures to ensure it remains strong, resilient and well-positioned to support employees, guests and other stakeholders through the COVID-19 crisis.”
According to a press release from the company, 329 of its Wendy’s restaurants “remain open for drive-thru and delivery.”
Financial records show Meritage made a roughly $13 million profit in 2019 and that both the CEO and president made around $1.9 million (not including stock options).
According to the company’s website, Meritage has more than 330 restaurants in 16 states and 11,000 employees. It’s hardly what you would consider a small business, but as a result of a heavily lobbied exception, the PPP loans were opened to chains and other big businesses. As long as the money is used for payroll and other specified uses, the companies can keep the cash free and clear. If not, it must be paid back with 1% interest.
News 8 is still waiting on a request for the full list of West Michigan businesses that received loans and how much they got.
The full statement from Meritage provided to News 8:
“Grand Rapids based Meritage Hospitality Group and its numerous subsidiary entities, operates 337 restaurants across 16 states. Each of the company’s Wendy’s restaurants employs an average of 30 to 35 people. The Paycheck Protection Program (PPP) loans were sought to enable each subsidiary entity to pay its employees during the significant downturn in business while restaurants and dining rooms were closed due to COVID-19 closure mandates and ‘Stay at Home’ orders.
“Seventy five percent of proceeds will be used for payroll costs and the remaining portion for rent and utility payments as defined by the U.S. Small Business Administration.”