Investing in the stock market is great, but what if you’re tired of all the ups and downs? What if you want to generate cash flow, not just paper gains? Wouldn’t it be nice to diversify away from stocks and put your money into other assets that are less volatile and more stable than stocks?
Investors are always looking for ways to generate cash flow and diversify their investments. One way is by investing in real estate, which can be a great investment if you’re willing to put the time into it. But what about those investors who don’t want to invest in real estate or need to diversify their holdings from too much concentration? Fractional franchise ownership is a way to still generate income and diversify away from stocks and real estate.
Fractional franchise ownership will allow you to passively earn income while still managing your day job and family obligations. With FranShares, you will be able to earn franchise-like cashflow without operating franchises. Soon you can invest in a diversified portfolio of franchises for as little as $500.
Franchise ownership has many benefits when compared to other investment classes. Outside of real estate, it is very hard to find income producing investments. In addition to producing income, franchise ownership comes with appreciation in equity as well as being diversified from the traditional stock and real estate markets.
The franchise industry in US has an economic output of over $750 billion, which accounts for about 3.5% of the US GDP. With almost 800,000 franchise establishments across the country, franchising is made up of over 4,000 brands across over 100 industries creating 7.6 million jobs. Although most closely associated with food, franchise industries can also include haircare, automotive, fitness, home services, education, b2b, pets, senior care, and just about any other business you can think of.
Typically there are huge roadblocks to investing in a franchise including the need of a six figure cash deposit, having the time to manage the business or having to leave your day job, and having the right skill set to manage profitably.
When these roadblocks are removed, franchising is a great asset class to invest in due to strong predictable returns, ability to mitigate risk, and transparency in your investment.
We intend to focus on high return service industries that often do not require a storefront or inventory. Invest with confidence by understanding each franchise’s average startup costs and returns. As part of Federal Trade Commission (FTC) regulation, each franchise discloses their estimated initial investment and average financial performance representations. FTC requires full disclosures on all costs and any performance representations. Additionally, low overhead service franchises increase your return on investment.
Franchising is not starting a business from scratch but using an already successful business model. We will further reduce risk by looking at more recession resistant industries, carefully vetting the franchisors, and ensuring we set up world class franchise operations that go beyond a typical franchisee management structure.
Regulated by the Federal Trade Commision (FTC) under The Franchise Rule, franchising is meant to have predictability by understanding the offered franchise, its officers, and other franchisees. A Franchise Disclosure Document (FDD) is required for every franchise and regulated by the FTC containing all essential franchise information.
Soon available to the public, FranShares will give the benefits of franchise investing to everyone while removing the roadblocks that typically exist. FranShares vertically integrates all aspects of franchise ownership.
FranShares will create portfolios of multiple franchise locations across multiple industries for diversification. When you invest, you get ownership in all of them. Our industry experts have vetted hundreds of franchise brands that are regulated by the Federal Trade Commission. We carefully select which brands to invest in based on profitability, growth, manageability, recession resistance, and executive leadership. FranShares handles all aspects of franchise management from location creation and hiring to ongoing operations at no extra cost. One of the top complaints of investors is high fees, we heard you and are putting our money where our mouth is. FranShares charges zero fees. We partner with our investors in every fund, generally putting up 20% of the total cost for 20% ownership. We receive distributions when our investors do. Additionally we receive our proportionate share of any franchise sale in the future and earn brokerage commissions from the franchisor, not out of our investors returns. FranShares pays out extra income to all investors to create a passive income stream. We encourage investors to plan to hold their investment for 5-10 years in order to see fully scaled up income and future exits. Franchises are highly sought after targets of investors and private equity. A secondary marketplace allows you to sell your shares to other investors if you need it early.
FranShares was created by Founder & CEO Kenny Rose. With a media reach of over 300 million people, he is a renowned expert on investing in franchises. His career started off in finance at Merrill Lynch, advising individuals on building their portfolios to preserve and grow wealth. Coming from a family of entrepreneurs, he sought out how to confidently go into business ownership with predictable results and was introduced to the world of franchising. As a franchise broker, he helped individuals identify, evaluate, and buy a franchise that matched their long term goals of either leaving the corporate world or adding an additional income stream to their portfolio. After rising through the ranks of the world’s largest franchise brokerage, he founded Semfia, a franchise brokerage focused on income-producing and manager-run franchises. His views on franchising have been featured in Business Insider, Forbes, ABC, TheHustle, American Express, the Amazon feature book “More Than Just French Fries,” and other publications around the world.
FranShares now has nearly 1,500 investors on the waitlist to invest after SEC approval. There’s no commitment or obligation to invest by joining the waitlist but will secure your spot to do so as each fund will be limited in size.
FranShares is excited to change the way we build wealth, come join us!
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405 W Superior Street, #93Chicago, IL60654
(1) Portfolio IRR projections are calculated using all cash flows, including the initial investment of $25,000,000 of offering proceeds, annual earnings before interest, depreciation and amortization (“EBITDA”), less estimated corporate taxes, and the sale of the entire portfolio at the end of the fifth year at 5x EBITDA.
(2) Cash Yield projections are calculated as the arithmetic mean (average) of five years of annual cash flows (including EBITDA, less estimated corporate taxes) divided by the initial investment of $25,000,000 of offering proceeds.
(3) Equity IRR projections are calculated using the initial investment of $25,000,000 of offering proceeds and the sale of the entire portfolio at the end of the fifth year at 5x EBITDA.