ApplePie Capital

ApplePie Capital is an online lender focused exclusively on franchise financing. It originates loans to franchise entrepreneurs and small business owners operating under established franchise brands, offering SBA, conventional and equipment financing through its own products and a network of lending sources. The company positions itself as a marketplace lender for the franchise industry, matching franchisees with capital appropriate to their stage of growth, from a first unit through multi-unit portfolios.

The application process is conducted online and structured in four steps: an initial submission of borrower objectives and basic information handled by relationship managers, pre-approval within days based on preliminary information, a commitment locking final terms and rates against finalized project documentation, and closing. In its earlier marketplace phase the firm confirmed borrower eligibility in two business days, issued a firm commitment within five business days, and funded in under 30 days, using a proprietary multi-factor underwriting model that evaluates historical franchise brand performance alongside borrower experience, credit quality and financials.

Alongside franchisee lending, ApplePie runs a franchisor-facing brand partnership program in which franchise systems work with the company to make financing available to their franchisees. Historically the platform also served the capital supply side, allowing investors to buy franchise loans in whole or fractionally and earn fixed-income returns.

Founding story

Denise Thomas founded ApplePie Capital to create a more efficient source of capital for franchise businesses; QED Investors dates its investment in the company to 2014 and the company raised a seed round in July 2014, beginning to make loans in January 2015.

Business model

ApplePie originates franchise loans to franchisees, distributing capital raised as debt commitments from institutional and individual investors and, through its acquired consultancy business, placing SBA, conventional and equipment loans via a network of third-party lenders. Franchisor brand partnerships serve as a primary origination channel, and in its marketplace model loans were offered to investors in whole or fractional interests.

Revenue derives from lending activity — originating franchise loans funded by committed debt capital — and from arranging SBA, conventional and equipment financing for franchisees through a lender network.

Traction

Reported metrics include over $65 million funded and 43 brand partnerships with over $12 million returned to investors as of April 2017; over $1.4 billion originated across 200+ franchise brands since 2015 with 60+ brand partners and a repeat borrower rate of nearly 30% per QED Investors; over $1.6 billion in originations cited in the CEO's company bio; and $3.5 billion in loans provided to franchisees, 100+ brand partners and franchisees from 200+ brands cited on the company website, along with a net promoter score of 83 versus a stated financial services/banking average of 34.

Latest developments

The company's website presents franchise financing products for franchisees and brand partnership offerings for franchisors, citing $3.5 billion in loans provided to franchisees, more than 100 franchise brand partners and franchisees from over 200 brands, and lists a leadership team including CEO and founder Denise Thomas, Chief Credit Officer James Goldsberry, Chief Revenue Officer Randy Jones, Chief Marketing Officer John Neff, Chief Solutions Officer Silvana Collura, SVP Business Development Jamie Davis and Brand Ambassador Ron Feldman.