Two Nashville, Tennessee-based banking veterans are teaming up on their third bank venture — this time with an eye on the national market.

With the launch of Sonata Bank, banking executive Dan Dellinger and Taco Bell franchise owner Farzin Ferdowsi have plans to grow the financial institution into a national digital platform serving employees of the quick-service restaurant (QSR) industry.

Dellinger, Sonata’s president and CEO, was instrumental in the launch of two previous banks. He teamed up with Ferdowsi, the CEO of Brentwood, Tennessee-based Management Resources Company, for both of those ventures. 

Dellinger and Ferdowsi launched Brentwood-based Premier Bank, now BancorpSouth, in 1997. The two teamed up again in 2005 to form Reliant Bank, now United Community Bank, where Dellinger served on the board and as CFO. 

The idea for Sonata Bank spawned in 2019, when Ferdowsi approached Dellinger about launching a tech-forward bank offering products and services digitally.

“I felt like it was a pretty good idea at the time, but the timing wasn't quite right,” Dellinger said. 

Then the COVID-19 pandemic hit, showcasing how various sectors, including the banking industry, could successfully operate in a remote environment, Dellinger said.

“It became very apparent that we could create another bank in this Middle Tennessee area that could be tech forward, have a single branch that delivers products and services, and have a remote workforce,” he said. 

The banking entrepreneurs’ plans for Sonata go beyond offering digital commercial banking services. They hope to eventually launch a national banking platform that serves employees of fast-food franchisees, a market segment that has a particular set of banking needs, Dellinger said.

Ferdowsi, who owns 90 Taco Bell restaurants in Middle Tennessee, southern Kentucky and Atlanta, saw the issues franchise owners and their employees face regarding turnover and access to banking services, Dellinger said.

Through offering banking services, rewards and benefits, Dellinger said Sonata can meet the needs of employees in the fast-food industry — and help employers attract and retain talent. Dellinger said he plans to add nonbank products such as telehealth and financial literacy to the platform. The goal is to help franchise owners offer a competitive employee package to their workers to help reduce turnover.

“We're creating the products and services,” he said, adding the franchisee would pay a subscription fee to Sonata to offer the services to their employees. New hires would be instructed to download the Sonata app as part of the onboarding process, Dellinger said.

Sonata selected Jack Henry for its core banking system, Dellinger said, adding the firm’s open application programming interface allows the bank to easily “bolt” additional products onto its app.

“It will all be branded under Sonata, and that's extremely important. With these employees, you want a single point of access for these different products and services,” he said.

Dellinger said he expects the business model will also give Sonata access to a young customer base. 

“A lot of these employees are young — 18 to 20 years of age,” he said. “What we’re looking at is not only gaining that relationship early, but retaining that relationship through their various life stages, whether that's professional career, college, home, whatever it might be. … The average life of a bank customer is roughly 14 years. So if you can get them early enough and retain that relationship and provide a good customer experience, then the chances of them staying with you are very good.”

Not a de novo

Rather than file for a de novo bank application, Dellinger said he and Ferdowsi struck a deal to recapitalize a small family-owned bank in Sebree, Kentucky. 

“The family didn’t want to sell” 132-year-old Sebree Deposit Bank, which has rebranded to Sonata Bank, Dellinger said. “They wanted to find somebody that they could work with and move them into that next phase of their life. They loved what we were doing, they loved the Nashville market, and they loved the quick-service segment. So that's how the relationship developed.” 

Sonata Bank has raised more than $20 million in capital, half of which has come from 15 investors who are owners of fast-food franchises, Dellinger said. Those franchise owners represent more than 100,000 employees. 

Sonata plans to launch its app targeting the QSR market in the second quarter of next year. The bank will first roll out the product to Ferdowsi’s Management Resources Company before branching out to other regions, Dellinger said.

Dellinger said he thinks there are additional opportunities to eventually bank the QSR industry — owners of franchises that may be too small to bank at some of the larger institutions. 

“Newer franchisees don't go to Bank of America or Chase to get their credit because they’re going to say, ‘You’re way too small for us.’ So our opportunity or point of entry is with those franchisees that don’t have a level of sophistication yet, or may not have established any credit facilities yet,” Dellinger said.