PPP Loans Extend Lifeline to Fast Food Franchises During COVID-19

Chicago, IL— July 9, 2020—Since the passage of the Coronavirus Aid, Relief, and Economic Security (CARES) Act in late March, the federal government has been battling the economic repercussions of COVID-19 by supplementing unemployment checks and extending loans to small businesses through the Paycheck Protection Program (PPP). A newly released analysis by experts at Anderson Economic Group shows how the popular PPP has propped up a beleaguered fast food restaurant industry.

“One-fifth of limited service restaurant workers lost their jobs between March and April,” said Brian Peterson, director of public policy at Anderson Economic Group. “Many more jobs would have been lost if not for PPP loans made to these restaurants.”

Peterson estimates that over 80% of fast food franchisees have received PPP loans, buoyed in part by the legal and financial support of their corporate parents.

Economic Footprint of PPP Loans

The AEG team reviewed data for ten of the largest fast food franchise restaurants nationwide to quantify the economic effects of the loans. As an example, the team estimates that loans to McDonald’s franchises supported 614,000 McDonald’s employees nationwide, along with $1.4 billion in employee earnings. Other major fast food franchises such as Pizza Hut, Subway, and Taco Bell used loans to support hundreds of thousands of employees as business ground to a halt and consumers avoided dining out. Altogether, experts estimate these franchises received over 68,000 loans worth $4.7 billion.

Franchise Estimated # of Loans (nationwide) Estimated Loan Total (millions) Direct Employment (thousands) Direct Earnings (millions)
Arby’s 2,831 $171 58 $128
Burger King 5,986 $474 153 $355
Dairy Queen 2,422 $109 38 $81
Domino’s 4,542 $236 75 $177
KFC 3,338 $213 70 $159
McDonald’s 13,239 $1,908 614 $1,431
Pizza Hut 6,194 $376 124 $282
Subway 20,468 $513 168 $385
Taco Bell 5,065 $363 117 $272
Wendy’s 4,574 $401 129 $301

In addition to using PPP loans to support their own employees, the loans also allow franchises to cover rent and utility costs. Restaurant spending on payroll, rent, and utilities circulates throughout state economies, supporting additional indirect jobs. AEG researchers quantified the direct and indirect jobs and earnings supported in each state.

Select from the tabs below to explore Anderson Economic Group’s economic footprint analysis by state.


Other Impacts

In addition to keeping employee paychecks intact, the program also ensured that employees would continue to receive benefits and has taken pressure off troubled state unemployment insurance and Medicaid programs. “We’ve seen many states struggle to process huge numbers of unemployment insurance claims during the COVID-19 crisis,” said Andrew Miller, a senior analyst. “If not for PPP, people seeking unemployment insurance and other forms of social assistance would have experienced even longer wait times and application system crashes. PPP loans allowed workers to continue to receive their current paychecks and benefits without having to apply for assistance.” By keeping fast food restaurants open, the program also guaranteed that essential workers would still have options to purchase an affordable meal even during the height of the crisis.


The Anderson Economic Group team estimated the national number of direct jobs and earnings supported by PPP loans among ten of the largest fast food franchises across the country, as well as the direct and indirect jobs and earnings supported by PPP loans at the state level. The team used data from multiple sources to formulate their estimates. The primary data source for this analysis was data on franchise locations, employment, and sales volumes as reported by ESRI Business Analyst. After determining franchise sales volumes, the team used U.S. Bureau of Economic Analysis data to estimate payroll at each franchise location. The team then used payroll figures to estimate the total PPP loan amount for all franchises by state.

After determining the distribution of franchises and loan amounts by state, the team applied U.S. Bureau of Economic Analysis RIMS II Economic Impact multipliers to estimates of PPP spending on rent, utilities, and payroll to determine the economic footprint of loans by state. The team then checked its estimates against PPP loan data recently published by the U.S. Small Business Administration to verify the accuracy of their estimates. This novel approach allowed the team to circumnavigate a number of problems with the SBA PPP loan dataset, including the dataset’s numerous errors, inexact loan amount totals, suppressed data, and lack of “doing business as” names for each recipient.

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About Anderson Economic Group

Anderson Economic Group, LLC, is a US-based research and consulting firm that specializes in economics, public policy, commercial damages, market analysis, and tax and regulatory policy. The firm, founded in 1996, is one of the most recognized boutique consulting firms in the US. AEG serves both public and private organizations including governments, corporations, nonprofit organizations, trade associations, and small businesses.

About Brian Peterson

Mr. Peterson is a consultant and director of public policy and economic analysis with Anderson Economic Group. His work focuses on economic and fiscal impact modeling, actuarial analysis, and environmental economics. Mr. Peterson has also worked as a policy analyst in regional economic development and transportation planning in the Chicago region.

About Andrew Miller

Mr. Miller is a senior analyst with Anderson Economic Group. His work focuses on economic and fiscal impact analysis. Recent projects have included economic impact analyses of Fermi National Accelerator Laboratory, COVID-19-related festival cancellations, and an interactive science learning center. Mr. Miller has also worked as a project coordinator at a higher education and workforce development-focused nonprofit.