Series| Hard Reset

The underdog challenging McDonald’s and Wall Street

Everytable is helping its employees accumulate wealth through one of the most common paths to business ownership: franchising.
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Since 2015, the Los Angeles-based startup, Everytable, has been innovating fast-food dining by offering healthy grab-and-go meals at competitive prices. But what’s potentially revolutionary about Everytable isn’t the prepackaged salads and wraps. It’s how the company is working to help its employees accumulate wealth. Everytable aims to do that by reimagining one of the most common paths to business ownership: franchising. 

There are about 750,000 franchise establishments in the U.S. today. Virtually all of the entrepreneurs who opened those franchises had to prove good credit and put down a lot of cash. For example, opening a McDonald’s franchise requires an initial investment of at least $500,000 in non-borrowed capital. And that’s just to get started.

Becoming a franchisee is often out of reach for Americans born into low-income communities without the head-start of generational wealth. Everytable wants to remove those hurdles.

The company recently started a program that trains and provides capital to employees from marginalized communities who want to work toward owning their own Everytable franchise. It’s a system that fuses both capitalistic and social principles, said CEO Sam Polk.

“Everytable is a business where there is no tradeoff between what’s good for our business and what’s good for our mission,” Polk told Freethink. “It’s all intertwined and synchronistic.” 

This socially focused franchise model could serve as a blueprint for how other companies can grow and profit while giving workers the opportunity to gain wealth — not just a wage.

How entrepreneurs benefit from franchising 

Here’s the basic idea: A business builds a successful brand and wants to expand. Instead of opening more stores on its own, the business partners with entrepreneurs called franchisees. Franchisees pay licensing fees — and sometimes buy stores and property — to sell products or services using the brand’s name. The franchisee owns the store. But franchisees must operate according to standards set by the franchisor, to whom they also pay royalties.

Franchising has helped businesses grow and prosper at minimal risk for more than a century.

It’s a relatively safe way for entrepreneurs to own and operate a business: Unlike starting a company from the ground up, franchisees get a headstart by piggybacking on the success of established brands. But the perks of owning a franchise have long been limited to people with access to capital.

From homelessness to business ownership

After her second divorce, Dorcia White-Brake became a single mother with three kids and no home. She worked multiple jobs and went to school on nights and weekends. 

“I always knew that I had to work really hard to get a better life for my kids,” she said.

Blake eventually landed a job at an Everytable store in the Watts neighborhood of Los Angeles. She worked her way up to store manager and later as a brand ambassador. Now, she’s set to become the company’s first franchisee.

It marks the launch of the company’s Social Equity Franchise program, which aims to help Everytable employees work toward owning their own store by providing them free training and loans with a 2-percent interest rate to cover the cost of buying the store. To enter the program, Everytable employees must work as a store manager for at least six months. But the program is free and becoming a franchisee requires no upfront capital.

“The average cost of an Everytable location is $250,000,” Bryce Fluellen, executive director of Everytable’s franchise program, told Black Enterprise. “However, the loan repayment doesn’t begin until the store starts to make a profit. Additionally, because most entrepreneurs of color often don’t have a cushion to fall back on, Everytable franchisees are guaranteed an annual salary of $40,000 in their first three years in business.”

The loans for Everytable’s franchise program come from foundations like the W.K. Kellogg Foundation, the Annenberg Foundation, the California Wellness Foundation (Cal Wellness). Foundations like these are required to give away 5 percent of their endowment to charitable causes every year. As for the other 95 percent?

“For the most part, you know, it’s invested in Wall Street and the market,” Cal Wellness CEO Judy Belk told Freethink. “Cal Wellness and many other foundations are saying, ‘I think we can do a little better with that [money]. Why not use that capital to invest in the communities that we’re supposed to serve?’”

Despite the low interest rates, these foundations are still expecting a return on their investment.

The key difference is that this type of investment aims to yield not only capital returns, but also social returns.

Bringing fresh meals to food deserts

Everytable’s franchising model is just one aspect of its socially focused approach to capitalism. The company also varies its meal prices based on neighborhood: A wrap that sells for $5 in a lower-income neighborhood might go for $9 in a more affluent community. One reason Everytable is able to sell healthy food at competitive prices is because it prepares and packages all of its meals at a central kitchen, eliminating the costs of building kitchens in its stores.

The goal is to make nutritious meals price-competitive with traditional fast food, especially in low-income communities where healthy food is often hard to find. The 40 million Americans who live in so-called food deserts are more likely to live below the poverty line and suffer from conditions like diabetes, obesity, and cardiovascular disease

Everytable currently operates a handful of stores in the Los Angeles area, but over the long term it hopes to franchise thousands of stores across the nation. If successful, the company’s socially focused spin on franchising could create new avenues for disadvantaged Americans to accumulate generational wealth — not only within fast food, but any franchisable industry: retail, automobile repair, shipping, etc. 

For now, Everytable is focused on guiding more workers through the journey from employee to manager to owner.

“I’ve worked very hard to get to this point in my life,” Blake told Freethink. “I believe poor people just need some extra help. I never ask for handouts. I don’t want free this or free that. I just want to be able to have the same opportunities given to me and my children.”

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