Investment firm Lafayette Square announced Thursday that it's partnering with Yum! Brands to lend up to $50 million to underrepresented franchisees.
The financing program, called Franchise Fast Start, is for new and existing operators. Lafayette Square said the initiative will help bring diverse ideas to the franchising community and open opportunities for entrepreneurs pursuing multi-unit transactions.
"This program is another step toward our goal of becoming the world's multi-brand franchisor of choice which strives to create a global franchise system as diverse as the communities we serve," Wanda Williams, head of Yum! Global Franchising, said in a statement. "Our communities and the industry benefit from diversity of ownership and thought, and Franchise Fast Start will help level the franchising playing field and break down barriers for underrepresented people to become franchise owners."
The news comes about a year after the KFC, Taco Bell, Pizza Hut, and The Habit Burger Grill parent launched the Yum! Franchise Accelerator, an MBA elective opportunity for people of color and women interested in franchising. In partnership with the University of Louisville and Howard University, 10 second-year MBA students were selected to participate in a five-month fellowship where two participants had the opportunity to become future franchisees.
A year prior, in May 2021, Yum! and Louisville unveiled the Yum! Center for Global Franchise Excellence, which provides existing and prospective operators with multiple levels of online education focusing on the franchising model. This venture also prioritizes recruiting and educating underrepresented groups. The center is part of Yum!'s $100 million five-year commitment to promote equity and inclusion, education, and entrepreneurship for employees.
Lafayette Square's goal is to form investment opportunities in "overlooked places and underserved markets," according to its website.
"We are 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 and existing franchisees across the United States. It is a compelling opportunity to expand access to capital to underserved people and communities and achieve impact at scale."
Yum! finished 2022 with 55,361 restaurants worldwide, including 27,760 for KFC, 19,034 for Pizza Hut, 8,218 for Taco Bell, and 349 for The Habit. The company opened 4,560 gross new units last year, the equivalent of one new restaurant every two hours, beating a previous record it set in 2021 when it opened 4,180 gross new units. That’s more than 8,700 new units in just two years.