What Franchise and Hospitality Companies Should Know! A Guide to CARES and Other Relief Programs 

The Coronavirus pandemic is impacting every business sector across the globe. Many new resources, however, including the new Coronavirus Aid, Relief, and Economic Security (CARES) Act, provide franchise and hospitality businesses with opportunities for relief. The following information is intended to aid franchise and hospitality companies in understanding options available to them during this time. This information should be viewed as a general guide, and companies are encouraged to seek fact-specific advice from counsel should they have additional questions.

CARES Act Relief Overview

The CARES Act, signed into law on March 27, 2020, provides more than $2 trillion of aid to companies in the public and private sector. The franchise and hospitality industries should pay particular attention to loans and tax relief opportunities available under the Act.

Paycheck Protection Program

$349 billion of the CARES Act is earmarked for the Paycheck Protection Program (PPP) which seeks to provide zero-SBA fee, less-than-four-percent interest loans to small businesses that cover 2.5 times their average total payroll costs incurred during the one-year period prior to the date on which the loan is made. The maximum loan available under the PPP is $10 million.

Is my franchise eligible?

This loan program will be available to many franchisors and should be available to nearly all franchisees. The following categories of organizations are eligible:

• Any organization operating as a franchise that is assigned a franchise identifier code by the Small Business Administration (SBA). This can be confirmed at: www.sba.gov/sba-franchise-director

• Any small business concern, business concern, non-profit organization, sole proprietorship, independent contractor or self-employed individual that employs fewer than 500 employees per physical location.

• Any organization that meets the SBA’s size standards. • Any organization that is assigned a North American Industry Classification System code beginning with 72.

What is covered?

Read the full article here.

Additional Haynes and Boone guidance on the Paycheck Protection Program can be found here.

Haynes and Boone has a COVID-19task forcein place and continues to monitor the global impact of COVID-19 on various industries, including franchise and hospitality businesses. For questions on the CARES Act or other relief programs, please contact Deborah S. Coldwell at[email protected]or any member of the Haynes and Boone, LLPFranchise Practice Group.



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