Subway CEO John Chidsey on Wednesday defended the company’s franchisees who applied for small business loans to help offset the economic impacts from the coronavirus pandemic.
“We literally have 10,700 franchisees in the U.S., and on average they own two restaurants apiece,” Chidsey said on CNBC’s “Squawk on the Street.”
“We are the ultimate mom-and-pop, if you will, and totally woven into the fabric of local communities out there,” he added.
A number of large companies, many of them publicly traded, have in recent days been criticized for seeking loans through the Paycheck Protection Program. Some of the corporations, such as Potbelly and Shake Shack, have said they will return the money received through the program, which was created in March by the $2 trillion CARES Act.
The NBA’s Los Angeles Lakers, which received a $4.6 million loan, also said it has returned the funds.
Milford, Connecticut-based Subway is a privately held company and is “100% franchised,” Chidsey said.
Chidsey, the former CEO of Burger King, said he does not know of another quick-service restaurant chain with as many “small, one- or two-restaurant operators as we have.”
“So PPP and programs like that are vitally important to ensure that we can keep those 27,000 restaurants open,” Chidsey said.
Chidsey told Fox Business earlier Wednesday that more than 90% of Subway franchisees had applied for either PPP loans or Economic Injury Disaster Loans, a separate program run by the Small Business Administration.
Mark Cuban, the billionaire entrepreneur, has been critical of large companies trying to access PPP funds, but he told CNBC last week he believes restaurant franchisees should have access to them.
“For corporate headquarters, no. For individual franchisees, I don’t have a problem with it,” he said.