Fighting Racial Inequity With A New Franchise Model

Four years ago, Sam Polk looked at the urgent problems of food deserts in marginalized communities and the high price of healthy fare, in general. With that in mind, he formed LA-based Everytable to sell affordable, healthy meals, especially to people of color in underserved areas.

But that was only part of the puzzle. Polk also wanted to address racial inequities in access to capital, as well as the wealth-building potential of entrepreneurship. So, more recently, he announced the company’s Social Equity Franchise Program aimed at fighting racial inequity by helping entrepreneurs of color become Everytable franchisees.

Entrepreneurs will go through a six-month training program, receive a $40,000 a year salary for the first three years and receive low-interest loans to be paid back over five years, with payments starting only when the restaurant becomes profitable. The first franchisee plans to open her restaurant by the end of the year.

A Centralized Kitchen

Everytable manages to sell affordable, healthy food by relying on a fine-tuned production and sourcing model. A central kitchen makes individually packaged, grab-and-go meals using fresh ingredients. Then a fleet of 41 refrigerated delivery vehicles takes the food from the kitchen to Everytable stores, as well as to “smart fridges” that dispense healthy meals and charge customers based on the amount of food they remove. There’s also a subscription service through which customers receive deliveries at home.

 “We have a vertically integrated  fresh-prepared food model that makes use of a centralized kitchen with economies of scale, but that also can deliver meals almost immediately to customers, so the food is still fresh,” says Polk.

With 10 company-owned restaurants in and around LA, Polk plans to lease 25 to 30 stores next year to social equity franchisees in southern California and to expand into New York City, as well.

As for the impact of the pandemic, according to Polk it hasn’t hurt business at all. As soon Covid hit, the company pivoted to emergency relief work by, for example, providing meals to senior citizens. It’s now working with dozens of organizations, including the City of Los Angeles’ Department of Aging, Santa Monica College and Los Angeles Homeless Services Authority, to provide meals to marginalized groups.

The company recently raised a $16 million Series B round from French investor Creadev and Kaiser Permanente Ventures, among others.

From Hedge Fund Trader to Social Entrepreneur

Polk worked as a hedge fund trader on Wall Street in the early 2000’s. But in 2010, he decided to move back to LA, where he’d grown up, and do something more socially constructive. Eventually, he founded a nonprofit now named Food, Education, Access, Support, Together (FEAST), aimed at educating people, especially those in low-income communities, about nutrition and healthy eating.

His experience there led him to assess why healthy food was so expensive and analyze what he saw as a disconnect between the demand for such fare and the supply chain feeding it. His answer: It’s the business model, stupid. Most big consumer packaged goods and fast food companies had large-scale factories churning out processed, non- perishable foods and benefitting from significant economies of scale. Then they’d ship the stuff to stores, where it could sit on the shelves for a long time. As for fast food restaurants, they mostly used ingredients that were frozen or non-perishable. And they also were highly inefficient, each restaurant needing its own staff and kitchen.

The way to reduce his company’s costs, as well as the prices it charged customers, was to create a centralized kitchen that could make fresh, healthy food daily with ingredients bought directly from local farms and deliver it to Everytable restaurants. Venues wouldn’t need space for a kitchen or a big staff to prepare and serve the fare, further lowering costs. Also the company would charge more for meals sold in restaurants located in affluent areas ($8 or so a pop) than for the same food available lower-income neighborhoods ($5 or $6).  In 2018, the company launched its smart fridge and  meal delivery services.  

Last year, Polk got to work on the next step in his plan. He knew that entrepreneurship was a key factor in building wealth in low-income communities. Allowing marginalized entrepreneurs to open up Everytable franchises could be one solution, except for the pesky problem of their getting access to capital. What was needed, then, was a way to help potential franchisees finance their efforts and receive support while building up their ventures. He then raised $4.5 million in Program Related Investments from W.K. Kellogg Foundation, Annenberg Foundation, The California Wellness Foundation and Dignity Health to help fund loans, training and a three-year salary for franchisees.

Dorcia Whitebrake, the program’s first social equity franchisee, hopes to open up her store in Hollywood in a matter of weeks. A single mother struggling to bring up her son (she also has two grown children), while getting her associates degree, working as a teacher’s assistant and running a side business providing restroom services, Whitebrake met Polk in 2015 through her involvement with FEAST. After working at an Everytable store, followed by stints as a manager at two locations, Polk asked Whitebrake if she’d like to run her own franchise. “I plan to be in that store for a long time,” says Whitebrake, who will also work as the restaurant’s manager.