Financing

Yum Brands has a $50M deal to help finance underserved franchisees

The program with the investment firm Lafayette Square, called Franchise Fast Start, is designed to provide access to capital for underrepresented franchisees of KFC, Pizza Hut, Taco Bell and Habit Burger.
franchisee finance program
Yum Brands, owner of KFC, Taco Bell, Pizza Hut and Habit, has created a $50 million franchise financing program. / Photograph: Shutterstock.

Lafayette Square, a Miami-based investment firm, has signed a $50 million deal to provide financing for Yum Brands franchisees from underrepresented groups, the companies announced on Thursday.

The financing program is called Franchise Fast Start. It’s designed to connect qualified franchisees from underrepresented groups with access to the funding needed for them to become multi-unit restaurant operators. Yum Brands owns KFC, Pizza Hut, Taco Bell and Habit Burger, and all but about 5% of the company’s restaurants are franchised.

The program “will help level the franchising playing field and break down barriers for underrepresented people to become franchise owners,” Wanda Williams, head of Yum Global Franchising, said in a statement.

The financing program will be available to both new and existing franchisees, the company said. The program will be able to strategically finance qualified operators.

Lafayette Square is an investment firm that targets overlooked locations and underserved markets. It makes investments in multiple types of assets to generate returns while supporting local communities. “We’re excited to manage this financing program with Yum Brands,” Damien Dwin, founder and CEO of Lafayette Square, said in a statement.

“By collaborating with the world’s largest restaurant company, we believe we can reach more local businesses and impact more prospective franchisees across the United States,” he added. “It is a compelling opportunity to expand access to capital to underserved people and communities and achieve impact at scale.”

Restaurant chains have been looking to diversify their franchise bases of late, in part by making investments designed to provide financing and other resources for people in underrepresented groups to become operators. McDonald’s, Wendy’s and Yum Brands, in particular, have made this a priority in recent years.

Yum Brands in 2020 announced a $100 million plan to combat inequality, for instance, and it is working with the University of Louisville on an education and research center designed to help people of color and women find opportunities in franchising.

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