TASA ID: 11532

TKG understands the benefits of merging franchise expansion techniques with a public company structure and has the experience to create exponential growth through increased revenue, stockholder base and shareholder equity value.

There is a symbiotic relationship between business expansion utilizing the franchising system of growth, and building a loyal stockholder base in a public company.  

This synergy can be established when a company is already public, or it can be initiated when the company is private and subsequently goes public after the franchise program has been launched.  Building a stockholder base with loyal stakeholders in a public company is a natural evolution of expanding through franchising.

The process of seeking and finding qualified franchisees is not only the first step to building a strong franchise network, but it lays the foundation for attracting future stockholders that tend to retain their stock during good times and bad.

The reverse is also true; franchisees that own stock in the franchisor-public company are less inclined to be “breakaway” franchisees or vociferous disenchanted franchisees that are receptive to joining class action suits against the franchisor.

Another advantage that franchising offers to a public company is that it creates “off-balance sheet financing.” Facilities such as office, retail and manufacturing fixed assets, in addition to the infrastructure and personnel to support these modalities, can be created with franchisee-investor funding both domestically and internationally.  The franchisor does not have to dilute stockholder equity or issue debt instruments to control the channel of distribution of its goods and services through a franchise network.  

Next, the financial community, market makers, investment bankers, institutional investors, and individual investors all are familiar with franchising and have had some exposure to franchising whether it is in the retail, wholesale, manufacturing or business services sector.  This familiarity with franchising allows investors to feel comfortable with a company’s business model for expansion based on the hundreds of companies that have succeeded and have become household words, such as McDonalds, Hilton Hotels, Anytime Fitness, and 7-Eleven.  

TASA Article Disclaimer

This article discusses issues of general interest and does not give any specific legal or business advice pertaining to any specific circumstances.  Before acting upon any of its information, you should obtain appropriate advice from a lawyer or other qualified professional.

This article may not be duplicated, altered, distributed, saved, incorporated into another document or website, or otherwise modified without the permission of TASA and the author (TASA ID#: 11532). Contact marketing@tasanet.com for any questions.

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Tasa ID11532

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