Restaurants with Multiple Locations can Treat Each Location Separately in Counting to 500 Employees for PPP Loan

Jeff Storch | 04.03.20

Under the Payroll Protection Program (“PPP”) recently created by the CARES Act, qualifying organizations with fewer than 500 employees may be eligible for payroll-protection loans. The PPP includes direction specifically for restaurant operations with multiple locations in counting to 500 employees.

This direction is included in Section 36 of the of Small Business Act, which was added by the CARES Act to create the PPP. Section (36)(D)(iii) states that for restaurants and others providing accommodation and food services, in looking at the number of employees to see if they are ​“not more than 500 employees,” the business should look at each separate physical location. This means that a restaurant operation with multiple locations can treat each location separately when applying for the PPP loan. 

Section (36)(D)(iii) reads: 

“(iii) BUSINESS CONCERNS WITH MORE THAN 1 PHYSICAL LOCATION. — During the covered period, any business concern that employs not more than 500 employees per physical location of the business concern and that is assigned a North American Industry Classification System code beginning with 72 at the time of disbursal shall be eligible to receive a covered loan.” 

The North American Industry Classification System code beginning with 72 covers ​“Accommodation and Food Services,” see here. This covers restaurants (Restaurants and other Eating Places start with 72251).