The franchise market is a large but high growth space, which currently has about $42 billion in annual capital demand. ApplePie Capital’s franchise loan marketplace will connect high-quality franchise brands and their entrepreneurs with investors seeking attractive fixed income returns.
It is the first online marketplace to be solely dedicated to the franchise industry. ApplePie Capital hopes that this will bridge the financing gap for thousands of entrepreneurs who hope to open or extend their franchise business. It will widen access to capital, which will help propel businesses forward and create jobs.
ApplePie Capital was started in 2013 and in 2014 raised $3.77 million from Freestyle Capital, QED Investors and Signia Venture Partners, alongside a number of angel investors.
Denise Thomas, ApplePie Capital CEO and Co-Founder, commented:
“Franchise businesses are vital contributors to economic growth in the US representing nearly half a trillion in GDP and employing 1 out of every 20 working Americans in 2014. The franchise loan asset class is compelling from a risk perspective because franchise brands have measurable track records that investors can analyze. The brands have proven business models and have rigorous qualification for franchisees, which we further curate. They also offer a wealth of resources to help their franchises succeed—everything from location selection and training to systems implementation and marketing.”
Josh Felser, Founder at Freestyle Capital, added:
“The franchise industry is a large and growing market with significant capital demands—over $42 billion in 2013. However, small business loans overall are down by nearly 20% since 2008, and the loan application process can be time-consuming and costly. Marketplace lending has transformed the personal loan segment to the tune of $9 billion in 2014, and ApplePie is bringing this new economy to franchise financing.”
The marketplace will launch in the first quarter of 2015 and will offer loans of $100,000 to $1 million to qualified borrowers in all 50 states. Ken Switzer, CFO of Marco’s Pizza, the fastest growing pizza franchise in the US and one of the Founding Brands of ApplePie Capital’s marketplace, explained:
“Marketplace lending and franchises are a natural fit. Franchisees starting new locations can get buy in from investors in the local community and establish momentum before opening their doors.“