Opinion
Rose: Franchise investing outperforms the stock market and hedges inflation
“Investing in franchises provides outsized returns compared to the stock market, while providing passive income, a hedge against inflation, and diversification from market volatility.”
Assertion Not checkable as stated
Rose: FranShares had largest alt-investing launch with $18M in investments
“We launched last year and had the largest launch ever for an alternative investing platform with over eighteen million in investments, and we have 42,000 signups for our upcoming offerings.”
Opinion
Rose: Employee turnover is the biggest problem in franchising
“You know, the biggest problem in franchising is employee turnover, and it makes sense because there's no upward mobility and there's no benefits.”
Disclosure
Rose: FranShares raises preferred equity round at $19M post-money valuation
“It's a priced round with preferred equity at a nineteen million post-money valuation. And it's being led by Chicago Ventures.”
Insight
Rose: The franchise industry will not welcome founders from outside
“Because frankly, if they're not, franchise industry won't welcome them.”
Assertion Not checkable as stated
Kenny Rose: Mac Conwell passed on FranShares post-show over valuation
“You know, what happened was we have done a call
and he said, basically, you know, rounds too expensive.
We're not going to be able to get that ownership stake that we try and target.
So it's not going to be a fit.”
Assertion Contradicted
Rose: FranShares is the first fractional investment marketplace for franchises
“Franchairs is the first investment marketplace where people can invest in franchises.”
Assertion Supported
Rose: McDonald's prohibits outside investors for new franchise locations
“Because even McDonald's, their biggest barrier to growth for new franchisees, they have to already be wealthy. Then they have to be wealthy and want to run a McDonald's. And McDonald's does not allow outside investors.”
Assertion Supported
Rose: More brands are franchised than there are NASDAQ stocks
“There are more brands franchised than there are stocks on the NASDAQ.”
Assertion Supported
Rose: Masterworks valued at 4x gross investment volume; FranShares seeks 1x
“Masterworks went for four times their gross investment volume, and we're looking for a little over one.”
Insight
Rose: Service franchises yield higher margins than food by avoiding inventory
“Service businesses are where I see the most opportunity. You know, things like, again, the haircare and automotive space, where you're not having to constantly get inventory, you are, ah, you know, doing a markup for a service, and the profit margins are a lot…”
Assertion Not checkable as stated
Rose: FranShares invested in a waste management franchise with 70% margins
“Like, we're in a waste management franchise, and you know, it's got 70% profit margin.”
Disclosure
Rose: FranShares targets 20% IRR split between income and equity growth
“Our targets are, like, we're trying to go for around the 20% plus IRR. That's about a split, almost halfway between income, which is paid quarterly, and then equity growth.”
Insight
Rose: Local retail investors drive organic grand opening traffic
“The hardest thing is getting market awareness. You got to spend a lot on marketing, but if you prioritize those local investors first, they're there for the grand openings. They're bringing people to the grand opening.”
Assertion Not checkable as stated
Rose: Kenny Rose is the youngest franchise broker by decades
“Investment bankers make too much to make a leap, and brokers, I'm the youngest in the industry by 20 or 30 years.”
Assertion Not checkable as stated
Rose: Jillian Manus passed on FranShares after the show over valuation
“And at the end, she said she was out because of the valuation.”
Disclosure
Rose: FranShares has $2.475M committed of its $4M seed round
“We're raising a four million seed round, of which we already have 2.475 already committed and wired over.”
Assertion Not checkable as stated
Rose: FranShares-backed franchise hit profitability in month two
“We funded their second location. It hit profitability in the second month, which is pretty unheard of in franchising, and they just won franchisee of the year in that system.”
Disclosure
Rose: FranShares charges 1-2% annual investor fee and franchisee royalty
“It's one or two percent every year on the investor, and then for the franchisees, you know, we didn't want to take five or 10% of the raise up front. We find that would hinder their ability to grow. So instead, just like the franchisors, we do a royalty model.…”
Assertion Not checkable as stated
Rose: FranShares Is in Talks With Franklin Templeton and Fifth Third
“We've already been talking to groups like Franklin Templeton, Fifth Thirds Bank, First Trust, because they want to offer their clients new alternative investments, because right now they're all going into real estate.”
Assertion Not checkable as stated
Rose: FranShares is in regional expansion talks with Bojangles
“We've been talking to Bojangles for a while. They got almost a thousand locations, but they're stuck in the Southeast primarily.”
Assertion Not checkable as stated
Rose: Franchising's most widely used CRM is over 20 years old
“It's like the oldest CRM, or sorry, the most widely used CRM in franchising, it, I'm not going to trash it up here, but it's, Not great. It's over 20 years old.”
Assertion Supported
Rose: Franchising employs over 9 million people across 800,000 locations
“And you know, it's a massive part of the economy employs almost over nine million people. It's over 800,000 locations.”
Assertion Supported
Rose: US franchise industry generates over $800B annually
“You've heard of franchising. It does over eight hundred billion dollars domestically every year.”
