A few months ago, my husband and I stopped for lunch at a Subway restaurant in rural Maine. The owner of the franchise told us that she had recently received a forgivable loan through the Paycheck Protection Program that I co-authored, and it had been a lifeline in saving her business and allowing her to continue paying her employees.
This same success story is playing out across our state and throughout the country. Nearly 28,000 small employers in Maine have received nearly $2.3 billion in forgivable PPP loans to help keep them afloat and their employees paid. According to a U.S. Census Bureau survey, 76 percent of small business respondents in Maine reported receiving a PPP loan, helping to support approximately 240,000 jobs. Nationwide, more than 5 million forgivable PPP loans have been issued, helping to sustain the jobs of 50 million Americans.
The extraordinarily wide reach of the PPP is due in part to a change to the “affiliation rule,” which mostly applies to franchisees, that I advocated for alongside many of my Republican and Democratic colleagues. Without this change, franchises like the Subway restaurant I visited might not have been eligible to receive funding through the PPP.
Franchisees are small business owners who purchase the rights to open a local branch of a larger company, such as Subway, Dunkin’ Donuts, or Best Western. Franchisees typically own and operate one or a handful of locations. Although they are affiliated with a larger company and have the right to use the parent company’s name, trademark, and products, they are responsible for the profits and losses of their franchises. If they fail, their employees are out of work.
As one of the architects of the PPP, I heard from hundreds of small business owners, innkeepers, restaurant owners, hospitality and tourism organizations, and many others when we were drafting the PPP bill in March. They told us that unless the affiliation rule was fixed and they were given access to the PPP, the jobs of millions of people they employed would be at risk. This includes hotel room cleaners, dishwashers, cashiers and short-order cooks. Franchises have long qualified for Small Business Administration loans, and we extended this eligibility to the PPP. The legislation we authored, as well as a subsequent infusion of funds, passed Congress unanimously.
No American workers should be deprived of their paychecks and jobs simply because they work for a franchise that would otherwise qualify for a PPP loan. Yet that was the premise of a recent article by Pro Publica, a left-wing outlet that is financed by Democratic billionaires. The article, which appeared on the front page of the Bangor Daily News — itself a recipient of a PPP loan — maligned the program and made a dishonest argument that fixing the affiliation rule was a carve out for large hotel chains. This is demonstrably false. Under the PPP, a franchise hotel owner would be eligible to receive a forgivable loan as intended to help keep the business afloat and its workers employed. A large corporate chain like Hilton, however, is prohibited from receiving a PPP loan for its corporate headquarters or any hotels that it owns and operates directly.
Pro Publica’s agenda is not difficult to ascertain. S. Donald Sussman, who serves on Pro Publica’s board of directors, and George Soros, a major donor, are also backing the campaign of my opponent, Sara Gideon, through both direct contributions and dark money ads.
The social distancing and self-quarantining imposed to help mitigate the spread of the virus have caused widespread economic harm to the hospitality sector so important to Maine’s economy. The goal of the PPP is to protect America’s small employers and their employees so that jobs are retained and the economy can rebound quickly when the pandemic subsides. The PPP was deliberately designed to reach as many small businesses as possible. These loans were made forgivable as long as small employers met certain conditions and used the money to keep staff paid and employed, essentially providing funding directly to workers.
Franchise owners are small business owners. Both they and their employees deserve access to the PPP. Cynical attacks like the one published by Pro Publica hurt small businesses and jeopardize the jobs of their workers.
As a senator representing “Vacationland,” I know the tremendous toll the pandemic has taken on our hospitality, restaurant, retail, travel and tourism industries and the tens of thousands of Mainers they employ. I will continue to lead the fight for small businesses and jobs as your senator.
Susan Collins represents Maine in the U.S. Senate.