Invest in fractionalized multimillion-dollar paintings
Invest in franchises
Investments
$15,000
The minimum investment required is $15,000, which can be used to buy one or more assets.
Moderate Risk
3/5
Investing in art through Masterworks has risks, including concentration in a single artwork, limited insurance coverage, market volatility, and uncertainty in the secondary market.
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 Liquidity
2/5
You have the option to trade shares on the platform's secondary market, but there are certain restrictions on what and how you can trade.
Minimum Liquidity
1/5
While liquidity isn't guaranteed, the platform is developing a secondary market for potential future liquidity opportunities.
Receive new reviews from Fintorial
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.
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.
Who can invest
International
Masterworks welcomes individuals, corporations, or entities from any location, including the United States.
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.
Moderate Volatility
3/5
Art market fluctuations can lead to rapid price increases and declines, posing risks for short-term investors who may lose a significant portion of their capital.
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.
Regulation and audits
SEC Regulated
Masterworks provides SEC-approved offering circulars for each artwork, allowing public investment. AGD Legal reviews art investments annually.
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.
Insurance
Yes
Artworks are insured for up to $500 million by Lloyd's of London, but coverage may not fully match the artwork's value.
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.
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.
Withdrawals
Investors should wait for the company to sell the painting to receive their share of the proceeds, after deducting fees.
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.
Extra Fees
Yes
Masterworks charges a 1.5% yearly fee in equity, takes a 20% cut on art sales profits, and has a one-time sourcing fee per investment.
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.
Taxes
Tax Form
US taxpayers: subject to collectible gains rate (capped at 28%), unless owning 10%+ of a single painting. Masterworks provides a free Consolidated Tax Statement. Foreign investors: no US taxes or tax withholding.
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.