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So You Received PPP Funds—Now What?


A Merry Maids franchisee is spending some of the Paycheck Protection Program funds he received on additional training for house cleaners in COVID-19 practices.

Three separate franchisees who own units in five systems were among the first to receive Payment Protection Program loans, in all cases because of close connections with their bankers.

Their experiences provide a road map to other borrowers about how to spend the funds in the required way—challenging but not impossible, they say—and why others who haven’t yet applied should “absolutely” do so.

Finding ways to boost payroll

Michael Isakson (pictured below), a Merry Maids franchisee with operations in four states, received his Paycheck Protection Program funds on April 16. He was one of the first group of borrowers to do so after the COVID-19 relief program was signed into law March 27. 

Like other borrowers in the program, he applied for and received two-and-a-half times an average monthly payroll, which he carefully calculated based on January and February.

The former president and COO of ServiceMaster is active in the International Franchise Association, so had a heads up in March as PPP discussions moved quickly from idea to law. That means he’s already two weeks into the eight-week period in which he’s required to spend 75 percent of the funds on payroll; the clock starts ticking as soon as the money hits the bank account, at least so far. (Rulemakers are discussing modifications.)

Meanwhile, revenue is down about 50 percent at his franchises, which operate in Arkansas, Iowa, Kentucky and Ohio and posted $4 million total revenue last year and were on track for $4.75 million this year. “We’ll be pleased if we can do $3 million this total year,” he said, amid COVID-19.

He said there are several ways for using the PPP dollars on payroll, even with reduced revenue. One is serving the residential cleaning clients that remain. “We’re able to go and perform that work and use those PPP dollars”to pay wages. “So we’re generating income using those dollars, if you will,” he said.

Another is providing extra training to cleaners, such as on disinfection, social distancing and use of personal protection equipment. Cleanings take longer because of those items—for example, asking the homeowner via text to move into the basement when cleaning the upper floor, and vice versa.

A third is participating in the Merry Maids gifting program, which is voluntary for franchisees. “We’re going to give two hours of free cleaning to 50 nurses in each of our six locations,” he said. “We ask people to nominate nurses. And that give-back is great, because our ladies are not in a position to give a check, but they can say, ‘I just went and cleaned a hero’s house.’” He can use PPP funds to pay the cleaners.

They’re also trying to win back clients who’ve faded away. The overall goal: “We can work this eight-week period to get our revenue back up so we don’t have to lay off our ladies and men. At the end of this eight-week period, six weeks from now, we can say, Hey, we’re back.”

But he’s as unsure as anyone. “I hope that we can find a way to keep all of our teammates,” he said. “Unfortunately at this point we think that some of them may have to be laid off again after this program.”

A tactical pause

As one lender put it, the PPP program went “from law to loans in seven days, and everyone’s going to be confused.” That initially included Wyatt Batchelor of MBN Brands, which operates Jimmy John’s, Burger King and IHOP units, and employed close to 500 people in 32 restaurants pre-COVID.

So the first thing he did was take a “tactical pause,” something he learned as a former U.S. Army Ranger who retired as a captain in 2014 after three combat deployments. 

“Look, bullets start flying, not always the best thing to do is start shooting back immediately,” he said. “I think you should evaluate the situation, take in all the facts, and come up with a cogent plan to move forward.”

He relied heavily on his two bankers, Atlantic Capital in Georgia and Pacific Premier on the West Coast. “They’ve been nothing but exceptional to work with, helping us get over the hurdles.” Same goes for “our accounting partners at CohnReznick, Stephanie O’Rourk, in particular,” he said, also praising the franchisors of his brands like the consummate military man he is.

“We created a playbook, working with our partners, not trying to do it on our own,” he said, adding reaching out to others is necessary in a crisis like this pandemic. “It hit us in the face. I don't think anybody realized what was going to happen.”

MBN Brands has laid off about 10 percent of its workforce, “not as terrible as some of my colleagues” but still a “hard decision” to make, he said. “We have started the process of bringing people back. For the most part, the people we’ve been speaking to have been open and willing to come back.”

He is keeping meticulous records in the effort. “We have kept every single record of employees that we have. Our full intent is to bring everyone back as soon as possible.”

As of this week, $100 billion in PPP funds was still available in the second round, with a third round of relief a possibility. His advice to operators: “First off, I would 100 percent apply for this. If you haven’t already, get on the phone with your loan officers, your accountants, and come up with a plan on how to best attack this.”

‘Dude, I got connections’

Keith Miller, a longtime franchisee advocate with many political and business ties, operates three Subway shops in California and also has real estate interests. His connections came in handy.

“We did get our PPP funds, a week ago Monday,” he said in an interview April 30. “I’m a Wells Fargo customer. Remember when they got that cap, and then they got it released? I testified in the Senate banking subcommittee” in favor of lifting the cap.

Miller’s reference: On April 8, the U.S. Federal Reserve announced it was temporarily relaxing the $1.95 trillion cap on assets that it imposed on Wells Fargo in 2018 after its fake-account scandal. It can exceed the cap only for loans to small businesses under the PPP program and the Main Street Lending Program.

“Literally, the chair sends me an email at 8:36 in the morning, about the 8:30 press release that the Federal Reserve lifted the cap. I took that to my banker. The banker said the cap has been lifted,” Miller recalled. 

“Dude, I told you, I got connections,” he said with a laugh, adding he recommends cultivating relationships with bankers, even on a much smaller scale. 

His PPP loan was for $41,000. “I tried to lowball it, so we could hit the numbers,” he said, meaning the requirement to use 75 percent of the funds on payroll within eight weeks of receiving the funds. 
He made other financial moves as well. “Even before the shutdown, I had a $30,000 credit line; I pulled $30,000 out of that instantly. Because the last financial crisis, the banks canceled all of them. That was kind of a lesson learned from back then,” he said, referring to the financial crisis of 2008-09.

He considered tapping into his 401(k), which the CARES Act allows without penalty, “but then I realized I’m 50 years old” and decided against it.

Last time around, he did go that route. “In 2008 to 2010, I had to go steal some money out of my retirement. And back then it was a 20 percent penalty. And in retrospect it would have been smarter to dump a couple of my rental properties and default,” he said. “I was penalized for doing the right thing.”

As for today in his Subway business, “we’re running about 30 percent down. It’s really come up in the last week, and I can’t get employees back.”

But that’s a topic for another story in this series. Read Part 1 here, about lenders’ efforts to loan $660 billion in Paycheck Protection Program funds since March 27.


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About This Blog

The latest news, opinions and commentary on what's happening in the franchise arena that could affect your business.

Laura MichaelsLaura Michaels is editor of Franchise Times. She can be reached at 612.767.3210, or send story ideas to lmichaels@franchisetimes.com.
Beth EwenBeth Ewen is senior editor of Franchise Times. She can be reached at 612.767.3212, or send story ideas to bewen@franchisetimes.com.
Nicholas UptonNicholas Upton is restaurants editor at Franchise Times. He can be reached at 612.767.3226, or send story ideas to nupton@franchisetimes.com.
Mary Jo LarsonMary Jo Larson is the publisher of Franchise Times Magazine and the Restaurant Finance Monitor.  You can find her on Twitter at




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