Invest in franchises
Invest in private credit deals
Investments
$500
Investors can enter the private credit market via Percent with a minimum of $500, accessing a variety of asset-based securities and corporate loans.
High Risk
4/5
Investing in FranShares involves risks such as market volatility, economic changes, and franchise-specific challenges. Despite efforts to mitigate risks, there's no guarantee of returns, and FranShares' financial health could impact investments.
Moderate Risk
3/5
Investing on Percent comes with inherent risks, despite efforts to minimize these through a proprietary risk framework for its own deals. The risk levels can vary across the platform, depending on whether Percent or a third party underwrites the deal.
Minimum Liquidity
1/5
While liquidity isn't guaranteed, the platform is developing a secondary market for potential future liquidity opportunities.
Minimum Liquidity
1/5
Liquidity on Percent, as with many private credit platforms, varies by investment. Generally, these investments are less liquid than public stocks, tied to longer-term commitments without guaranteed immediate access to funds.
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Moderate Return
20 %
FranShares' TNT Franchise Fund Inc., with 55 locations across major U.S. metros, historically generates returns of 20 to 28% EBITDA per location after 16-18 months.
Moderate Return
13.41 %
As of February 1, 2024, Percent offers a 2.5% interest rate on idle cash in accounts and reports a historical weighted average APY of 13.41% on investments.
Long-term Investment
5-15 years
Income portfolios target a 10-15 year hold; growth funds aim for a 5-7 year period before selling.
Short-term Investment
3+ months
Percent offers investment horizons starting at 3 months, accommodating short-term investment strategies.
Who can invest
International
FranShares welcomes both accredited and non-accredited investors, focusing mainly on opportunities for non-accredited individuals. The platform also accepts international investors from many countries, depending on the specifics of each offering.
Who can invest
United States
Percent accepts investments only from accredited investors in the U.S. with U.S. bank accounts, adhering to Reg D 506(c) exemption rules.
Moderate Volatility
3/5
Franchise investments are subject to volatility due to economic shifts, industry trends, and franchise performance. While some franchises may be more resilient, values can fluctuate, posing a risk to investment value in adverse conditions.
Moderate Volatility
3/5
Assets on Percent generally show lower volatility than public market investments due to the nature of private credit, which often involves fixed returns from contractual agreements.
Regulation and audits
SEC Regulated
FranShares employs SEC regulations A+, D, and CF for its investment offerings, creating structures with a main investment vehicle and subsidiaries for each franchise brand, possibly including locations or groups of locations.
Regulation and audits
SEC Regulated
Percent is regulated under Regulation D, 506(c) of the Securities Act, allowing only accredited investors to participate after verifying their status.
Insurance
Yes
FranShares' insurance covers physical damages or losses to franchises but does not protect against market fluctuations, economic downturns, or fraud. Coverage limits may not fully reflect market values, meaning insurance does not eliminate all investment risks.
Insurance
Yes
Funds deposited with Percent are held at an FDIC-insured bank, ensuring protection up to $250,000, the maximum allowed by law, providing security for investors' capital in case of a bank failure.
Payouts
Dividends
FranShares plans to distribute excess cash flow to investors 12 to 18 months after each offering closes, with distributions expected quarterly. The frequency can vary (quarterly, semi-annual, or annual) based on the specific offering.
Payouts
No Recurring Payouts
Percent provides returns through interest payments or fixed returns from private credit deals, rather than traditional dividends.
Withdrawals
Investors in FranShares can receive their investment back through the sale of franchises, targeted within 5-15 years depending on the fund type. Upon sale, net proceeds are distributed to investors based on their fund ownership share.
Withdrawals
Upon investment maturity on Percent, funds (principal and yield) are credited to the investor's account. Investors can then transfer these funds to an external account or reinvest.
Extra Fees
Yes
FranShares charges a 1% to 3% annual management fee and possibly a performance fee, detailed in each offering's documents. No management fees are charged for the "TNT Franchise Inc." offering.
Extra Fees
Yes
From September 2023, Percent charges a fee of 10% on interest payments, not affecting the principal.
Taxes
Annual Statement
FranShares investors may owe capital gains taxes on profits from share sales and pay taxes on dividends, classified as ordinary or qualified based on holding periods and individual tax situations.
Taxes
Tax Form
Percent provides investors with a consolidated 1099-INT form each tax year, reporting all investment income as ordinary income for tax purposes.