Fast-Food Franchisee Considering Micro-Loans for Hourly Employees
Arby's franchisee Steve Jackson, who already offers an annual scholarship fund, meal discounts and paid time off, is thinking about introducing a micro-loan program for employees.
By David Farkas, Senior Editor -- Chain Leader, 7/1/2009
Here's a way to make sure employees don't leave you: Make like a payday lender.
Steve Jackson is thinking about introducing a micro-loan program at the Bailey Co. The 40-year-old Golden, Colo., business, which franchises 58 Arby's restaurants, has a history of showing concern for employees. There's an annual scholarship fund for employees and their dependents, meal discounts and paid time off. Both hourlies and managers qualify.
Yet Jackson, a district leader, believes there's a need to offer workers $200 to $500 loan. He got the idea from reading Steve Bigari's book, The Box You Got.
A former McDonald's franchisee in Colorado Springs, Bigari came up with the McFamily Benefits package, an innovative offering that gave employees access to transportation, child care, health care and other benefits. Bigari now runs America's Family, an employee-benefits consultancy, and owns several family entertainment venues in Colorado.
Jackson doesn't want employees, especially hourlies, borrowing money from payday lenders, whose annual percentage rates on small loans can run from 390 percent to 780 percent. He estimates company interest rates will be considerably lower, from 10 to 20 percent.
The company will automatically deduct payments from borrowers' paychecks. Fees from interest rates will help fund other employee programs, Jackson says.
Jackson isn't sure whether the company will administer a loan program internally or externally. Because no one at the Bailey Co. has ever managed one, he may end up partnering with America's Family.
"If someone had to use it a time or two, it would be a large benefit, a much better one than getting raked over the coals by these payday lenders," Jackson declares.
MORE: Slumping sales force human-resources execs to focus on their own problems despite good ideas from outside the industry.
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