SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILEDPURSUANT
TO (s) 240.13d-1(a) AND AMENDMENTS THERETOFILED
PURSUANT TO (s) 240.13d-2(a)
UNDER THE SECURITIES EXCHANGE ACT OF 1934
Franchise Group, Inc.
(Name of Issuer)
Common Stock, par value $0.01 per share
(Title of Class of Securities)
35180X105
(CUSIP Number)
Bryant R. Riley
11100 Santa Monica Boulevard, Suite 800
Los Angeles, CA 90025
(818) 884-3737
With a copy to
:
Patrick S. Brown
Sullivan & Cromwell LLP
1888 Century Park East
Los Angeles, CA 90067
(310) 712-6600
(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)
May 10, 2023
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statementon Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of (s)(s)240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check
the following box.
Note
. Schedules filed in paperformat shall include a signed original and five
copies of the schedule, including all exhibits. See (s) 240.13d-7 for other
partiesto whom copies are to be sent.
* The remainder of this cover page shall be filledout for a reporting person's
initial filing on this form with respect to the subject class of securities,
and for any subsequentamendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of thiscover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act")or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however,
see
the Notes).
SCHEDULE 13D
CUSIP No. 35180X105
1 NAMES OF REPORTING PERSONS
BryantR. Riley
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a)
(b)
3 SEC USE ONLY
4 SOURCE OF FUNDS
PF
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
UnitedStates of America
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
1,804
8 SHARED VOTING POWER
0
9 SOLE DISPOSITIVE POWER
1,804
10 SHARED DISPOSITIVE POWER
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,804
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
Less than 1%*
14 TYPE OF REPORTING PERSON
IN
* Percentage calculated based on 35,172,623 shares of Common
Stockoutstanding as of May 5, 2023, as reported by the Issuer in the
Form 8-K filed by the Issuer with the Securities and Exchange
Commissionon May 11, 2023 (the "8-K"). B. Riley Financial, Inc. ("B.
Riley"), of which Bryant R. Riley (the "ReportingPerson") serves
as Chairman and Co-Chief Executive Officer, has entered into
certain agreements with affiliates of Brian R. Kahn("Kahn" and
such affiliates collectively with Kahn, the "Kahn Affiliates") in
connection with the transactionsdescribed in Item 4 to this Schedule
13D. As a result, the Reporting Person may be deemed to be a
member of a "group" pursuantto Rule 13d-5(b)(1) promulgated under
the Act with the Kahn Affiliates and certain of their respective
related persons. Common Stocklisted as beneficially owned by the
Reporting Person excludes Common Stock held by the Kahn Affiliates,
as to which the Reporting Persondisclaims beneficial ownership.
The Reporting Person is not a party to any of those contracts.
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Item 1. Security and Issuer
This statement on Schedule 13D relates to thecommon stock, par value $0.01 per
share (the "Common Stock"), of Franchise Group, Inc., a Delaware corporation
(the "Issuer").The principal executive offices of the Issuer are located at
109 Innovation Court, Suite J, Delaware, Ohio 43015.
Item 2. Identity and Background
The Reporting Person, an individual and citizen of the United States of
America, is Co-Chief Executive Officer and Chairman of the Board of Directors
of B. Riley. The address of the business office of the Reporting Person is
11100 Santa Monica Blvd., Suite 800, Los Angeles, California 90025.
During the last five years, the Reporting Person has not been: (i) convicted
in a criminal proceeding (excluding traffic violations or similar
misdemeanors); or (ii) a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such
proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to,
federal or state securities laws or finding any violation with respect to such
laws.
Item 3. Source and Amount of Funds or Other Considerations
The Reporting Person received the 1,804 shares of Common Stock reported on
herein in his prior capacity as a director of the Issuer in consideration for
his services as director.
Item 4. Purpose of Transaction
The Reporting Person acquired the Common Stockreported hereunder for
investment purposes and in his prior capacity as a director of the Issuer (as
described above). In pursuing suchinvestment purposes, the Reporting Person
may further purchase, hold, vote, trade, dispose or otherwise deal in the
Common Stock at times,and in such manner, as he deems advisable to benefit
from, among other things, (1) changes in the market prices of the shares of
CommonStock~ (2) changes in the Issuer's operations, business strategy or
prospects~ or (3) from the sale or merger of the Issuer.To evaluate such
alternatives, the Reporting Person will closely monitor the Issuer's
operations, prospects, business development,management, competitive and
strategic matters, capital structure, and prevailing market conditions, as
well as other economic, securitiesmarkets and investment considerations.
Consistent with his investment research methods and evaluation criteria, the
Reporting Person maydiscuss such matters with the management or Board of
Directors of the Issuer (the "Board"), other stockholders, industry
analysts,existing or potential strategic partners or competitors, investment
and financing professionals, sources of credit, and other investors.Such
evaluations and discussions may materially affect, and result in, among other
things, the Reporting Person (1) modifying his ownershipof the Common Stock~
(2) exchanging information with the Issuer pursuant to appropriate
confidentiality or similar agreements~(3) proposing changes in the Issuer's
operations, governance or capitalization~ (4) pursuing a transaction that
would resultin the Reporting Person's acquisition of all or a controlling
interest in the Issuer~ or (5) pursuing one or more of the otheractions
described in subsections (a) through (j) of Item 4 of Schedule 13D.
On May 10, 2023, B. Riley entered into certainagreements pursuant to which B.
Riley has, among other things, agreed to provide certain equity funding and
other support in connectionwith the acquisition (the "Acquisition") by Freedom
VCM, Inc., a Delaware corporation ("Parent"), of the Issuer.Parent has agreed
to acquire the Issuer pursuant to an Agreement and Plan of Merger, dated as of
May 10, 2023, by and among Parent, FreedomVCM Subco, Inc., a Delaware
corporation and a wholly-owned subsidiary of Parent ("Merger Sub"), and the
Issuer (the "MergerAgreement"), pursuant to which, upon the terms and subject
to the conditions set forth therein, at the closing, Merger Sub willmerge with
and into the Issuer, with the Issuer surviving the merger as a wholly owned
subsidiary of Parent. The buyer group includesmembers of the senior management
team of the Issuer, led by Kahn, the Issuer's Chief Executive Officer, in
financial partnershipwith a consortium that includes B. Riley. The Reporting
Person is not a party to the Merger Agreement.
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Pursuant to the Merger Agreement, at the effectivetime of the Merger (the
"Effective Time"): (a) each share of Common Stock (each, a "Share") held by
stockholders(other than the Excluded Shares (as defined by the Merger
Agreement)), will receive $30.00 in cash per Share; (b) each share of the
Issuer's7.50% Series A Cumulative Perpetual Preferred Stock will be converted
or, at the election of the Issuer, redeemed, in each case in accordancewith
that certain Certificate of Designation of 7.50% Series A Cumulative Perpetual
Preferred Stock of the Issuer, dated as of September18, 2020; and (c) certain
Shares held by certain stockholders of the Issuer shall instead be subject to
the treatment provided in a rollovercommitment letter entered into in
connection with the Acquisition.
Certain financial institutions have agreed toprovide Parent with debt
financing in an aggregate principal amount of up to $475 million on the terms
and subject to the conditions setforth in a debt commitment letter. Under the
terms of the Merger Agreement, if the closing of the Merger does not occur by
November 10,2023, the Issuer or Parent may terminate the Merger Agreement
subject to the terms and conditions thereof. Closing of the Merger is
conditionedon customary conditions to closing including expiration of the
waiting period (and any extension thereof), if any, applicable to the
consummationof the Merger under the Hart-Scott Rodino Antitrust Improvements
Act of 1976 and the receipt of the Requisite Company Vote (as definedin the
Merger Agreement).
Item 5. Interest in Securities of the Issuer
As a resultof certain of the agreements described in Item 4 above entered into
by B. Riley and the Reporting Person's role as Chairman andCo-Chief Executive
Officer of B. Riley, the Reporting Person may be deemed to have formed a
"group" pursuant to Rule 13d-5(b)(1)promulgated under the Act with certain
Kahn Affiliates, Andrew M. Laurence, and their respective related persons. The
Reporting Personhas been advised that (i) Kahn beneficially owns 12,231,350
shares of Common Stock, Vintage Capital Management, LLC (for which Kahn
servesas investment manager) beneficially owns 2,500,000 shares of Common
Stock and Andrew M. Laurence (a partner of Vintage Capital Management,LLC)
beneficially owns
573,482
shares of Common Stock. The aggregate beneficial ownershipof such "group,"
including the shares of Common Stock beneficially owned by the Reporting
Person, is equal to
12,806,636shares of Common Stock, representing
approximately 36.4% of the outstanding shares of Common Stock.The foregoing
percentage is based on
35,172,623 shares of Common Stock outstanding as of May 5, 2023, as reported
by the Issuerin the 8-K.
The Reporting Person disclaims beneficial ownership of any shares of capital
stock ofthe Issuer owned by the other members of such "group".
(a) - (b)
The responses of the Reporting Person to Rows7 through 13 of the cover page of
this Schedule 13D are incorporated herein by reference. As of the date hereof,
the Reporting Personbeneficially owned, in the aggregate, 1,804 shares of
Common Stock, representing less than 1% of the outstanding shares of Common
Stock.The percentage in this paragraph and elsewhere in this Schedule 13D
relating to beneficial ownership of Common Stock is based on 35,172,623shares
of Common Stock outstanding as of May 5, 2023, as reported by the Issuer in
the 8-K.
(c) Except as set forth in this Schedule 13D,the Reporting Person has not
effected any transactions in the Common Stock in the 60 days prior to the date
of this Schedule 13D.
(d) Not applicable.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer
Not applicable.
Item 7. Material to Be Filed as Exhibits
Not applicable.
4
Signature
After reasonable inquiry and to the best of myknowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Dated: May 11, 2023
/s/
Bryant R. Riley
Bryant R. Riley
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