Investing Basics

Every offering’s returns will vary based on what franchises are included. Please review each offering for detailed information about target returns and the risks associated with an investment.

The minimum investment amount for each offering will vary, but FranShares offers opportunities to invest from as low as $500.

The primary way to fund your investment is via an ACH transaction or wire transfer from a linked bank account. You can link your bank account either by 1) directly entering your routing and account numbers, or 2) by using your online banking credentials.

For now, each offering has a hard cap, so once it fills up you cannot directly add to your investment. We will regularly be opening new offerings that investors can participate in. Additionally, investors may be able to invest in existing offerings through our secondary trading platform when available.

At FranShares, we strive to build investment opportunities for both accredited and non-accredited investors. We expect to primarily focus on offerings available to non-accredited investors; however, at times we will have offerings that are only available to accredited investors.

Note that this is not legal advice. But generally, a person is an “Accredited Investor” if s/he meets any of the following four criteria:

• The individual’s net worth (individual or combined with spouse) exceeds $1 million, excluding the value of the individual’s primary residence.

OR

• The individual’s income exceeds $200,000 in each of the last two years and there is reasonable expectation to achieve the same income level in the current year.

OR

• The individual’s joint income with a spouse exceeds $300,000 in each of the last two years and the couple has a reasonable expectation to achieve the same income level in the current year. 

OR

• The individual has the knowledge and expertise to participate in private investment opportunities based on relevant professional certifications, credentials, and designations. As of today, individuals with Series 7, Series 65, and/or Series 82 security licenses are considered “Accredited” regardless of net worth and income.

A trust is accredited if it meets any of the following criteria:

• Possesses investments of more than $5 million, was NOT formed for the specific purpose of acquiring the investment, and is directed by a sophisticated person (defined by the SEC as someone with the sufficient knowledge and experience in financial and business matters to evaluate the merits and risks of a prospective investment).

OR

• The trust utilizes a bank, insurance company, registered investment company, business development company, or small business investment company as a trustee.

OR

• The trust is revocable and grantor(s) are accredited individual investors.

An entity is accredited if it meets any of the following criteria:

• Possesses investments of more than $5 million and was NOT formed for the specific purposes of acquiring the investment.

OR

• All equity owners of the entity are accredited individual investors.

For individuals, the documents depend on whether you are being verified under the net worth test, one of the two income tests, or the knowledgeable investor test. For net worth verification, you’ll need to submit any combination of bank statements, brokerage statements, other statements of securities holdings, and appraisal reports to assess the value of your assets. For income-based verification, evidence can be supported by tax returns, W-2, K-1, 1099, or other government documents. For the knowledgeable investor test, a copy of an unexpired Series 7, Series 65, or Series 82 securities license will suffice. The submitted documents should show the investor(s) name and be dated and issued within 90 days of submission.      

For business entities and trusts, the $5 million minimum assets can be shown by furnishing a bank statement, brokerage statement, and/or appraisal reports of real estate or other tangible assets held by the entity. If a business entity does not meet the minimum assets requirement, each owner of the business entity must be individually verified as an accredited investor, in which case the above-mentioned documentation requirements for individuals apply. 

Similarly, if a trust does not meet the minimum assets threshold, the trust documents should be submitted to determine if the trust qualifies based on the type of trustee, or if the trust is revocable. If the trustee wishes to achieve accreditation under the condition that the trust is revocable, then all trust grantor(s) must be accredited individually, in which case the above-mentioned documentation requirements for individuals apply.

FranShares can accept investments from most countries outside of the U.S. depending on the offering. Please review details of each individual offering for more details.

FranShares is not charging any management fees for our initial offering “TNT Franchise Inc.”. 

FranShares will be co-investing with our investors in every fund and will be receiving distributions along with our proportionate share of any franchise sale in the future. We will also earn a brokerage commission from the franchisor, not out of our investor’s returns 

Distributions are generally dispersed on a quarterly, semi-annual, or annual basis, depending on the specific offering. These distributions are automatically deposited into investors’ brokerage accounts. The amount of each distribution is contingent upon your investment allocation and the profits generated during the relevant period.

Every offering’s returns will vary based on what franchises are included. Please review each offering for detailed information about expected returns.

We will likely start distributions of excess cash flow 12 to 18 months after each offering is closed. We expect to have quarterly distributions.