Franchise Brands (FRAN) AI Stock Analysis

• Market Cap: £259.92M
• Dividend Yield: 1.52%
• Average Volume (3M): 219.24K
• Price to Earnings (P/E): 32.8
• Beta (1Y): 0.77
• Revenue Growth: 15.22%
• EPS Growth: 1.23%
• Country: UK
• Employees: 646
• Sector: Industrials
• Sector Strength: 84
• Industry: Specialty Business Services
• EPS (TTM): 0.04
• Shares Outstanding: 193,784,070
• 10 Day Avg. Volume: 385,433
• 30 Day Avg. Volume: 219,238
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: £138.00
• Price Target Upside: 2.22% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 67 Neutral
• Price Target: 138.00p ▲(2.22% Upside)

Franchise Brands' strong financial performance and positive corporate events bolster its score, offsetting some negative impact from the bearish technical analysis and relatively high valuation. The stock's robust fundamentals and strategic initiatives are key strengths, while overvaluation and technical weakness are notable concerns.

Positive Factors

Demand and Performance

Franchise Brands has benefited from resilient underlying demand for its essential reactive and planned services, showing improvement in performance since the start of the year.

Strategic Initiatives

The 'One Franchise Brands' strategic initiative is making good progress to enhance sales, create an efficient overhead structure, and drive operational gearing.

Valuation and Market Potential

The current valuation is seen as compelling, with potential for the company to reach a medium-term market cap of £702m to £810m, significantly higher than the current level.

Negative Factors

Cyclical Sector Dependency

Pirtek has seen a gradual improvement in its more cyclical sectors with signs of potential larger project work coming later in the year.

Leverage Concerns

Year-end leverage was 1.9x and is expected to fall to less than 1.5x by year-end FY25E due to strong cash generation.

Franchise Brands Business Overview & Revenue Model

Company Description

Franchise Brands (FRAN) is a multi-brand franchisor specializing in the development and management of franchise businesses across various sectors, including food and beverage, retail, and services. The company focuses on identifying and supporting high-potential franchise concepts, providing franchisees with the tools and resources needed to succeed. Through its portfolio of established brands, Franchise Brands aims to drive growth and profitability for its franchise partners while expanding its market presence.

How the Company Makes Money

Franchise Brands generates revenue primarily through franchise fees and royalties from its franchise partners. The company typically charges an initial franchise fee when a new franchisee joins the network, which provides an upfront revenue stream. Additionally, FRAN earns ongoing royalties based on a percentage of the franchisee's gross sales, creating a consistent revenue source tied to the performance of its franchise network. The company may also generate income through training and support services, marketing fees, and sales of proprietary products or supplies to its franchisees. Strategic partnerships with suppliers and service providers further enhance its revenue potential, allowing FRAN to offer competitive pricing and additional value to its franchisees while capturing a share of the supply chain.

Franchise Brands Financial Statement Overview

Summary

Franchise Brands demonstrates strong financial performance with robust revenue growth and solid profitability margins. The company maintains a stable balance sheet with moderate leverage, and its cash flow position is robust, supporting future growth opportunities. While ROE could be improved, the company's financial fundamentals are sound, positioning it well within the specialty business services industry.

Income Statement

Franchise Brands has shown robust revenue growth, with a 14.81% increase from the previous year. The gross profit margin is strong at 59.85%, and the net profit margin has improved significantly, reflecting enhanced profitability. EBIT and EBITDA margins are healthy, indicating efficient operations and strong earnings before interest, taxes, depreciation, and amortization.

Balance Sheet

The company maintains a solid equity position with an equity ratio of 58.55%, indicating financial stability. The debt-to-equity ratio is moderate at 0.40, suggesting a balanced approach to leverage. Return on equity is reasonable at 3.33%, though there's room for improvement in maximizing shareholder returns.

Cash Flow

Franchise Brands has displayed strong cash flow management, with a notable 48.08% growth in free cash flow. The operating cash flow to net income ratio is impressive at 3.86, indicating efficient cash generation relative to earnings. Free cash flow to net income is also healthy, reflecting effective capital expenditure management.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	139.21M	121.27M	92.73M	57.69M	49.29M
Gross Profit	83.32M	59.07M	30.79M	21.93M	20.93M
EBITDA	32.81M	23.01M	14.25M	5.87M	5.88M
Net Income	7.28M	3.04M	8.13M	4.23M	2.79M
Balance Sheet
Total Assets	373.30M	382.44M	132.44M	67.27M	68.55M
Cash, Cash Equivalents and Short-Term Investments	12.92M	12.28M	10.80M	9.05M	13.20M
Total Debt	87.98M	94.56M	2.46M	2.53M	8.24M
Total Liabilities	154.74M	168.05M	29.40M	19.94M	24.71M
Stockholders Equity	218.56M	214.39M	103.04M	47.33M	43.84M
Cash Flow
Free Cash Flow	25.02M	16.89M	6.27M	5.12M	4.46M
Operating Cash Flow	28.16M	19.95M	7.73M	7.27M	5.24M
Investing Cash Flow	-2.71M	-51.44M	2.56M	-3.02M	-779.00K
Financing Cash Flow	-24.72M	33.11M	-8.74M	-8.40M	7.06M

Franchise Brands Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 135.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:FRAN, the sentiment is Negative. The current price of 135 is below the 20-day moving average (MA) of 137.84, below the 50-day MA of 145.72, and below the 200-day MA of 147.66, indicating a bearish trend. The MACD of -3.47 indicates Negative momentum. The RSI at 43.85 is Neutral, neither overbought nor oversold. The STOCH value of 65.02 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:FRAN.

Franchise Brands Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
KEYS	78 Outperform	£196.33M	22.84	45.84%	2.88%	13.00%	11.16%
RWS	74 Outperform	£310.64M	12.33	2.82%	14.70%	-0.78%	―
FRAN	67 Neutral	£259.92M	32.85	3.61%	1.52%	15.22%	1.23%
RST	67 Neutral	£364.90M	38.85	4.01%	1.98%	6.90%	―
Sector *	66 Neutral	£2.67B	13.00	3.30%	3.25%	2.35%	-22.12%
BEG	64 Neutral	£186.75M	29.67	7.85%	3.49%	12.41%	330.43%
CPI	57 Neutral	£276.41M	16.75	9.00%	―	-4.87%	―

Franchise Brands Corporate Events

Franchise Brands Delays Main Market Listing Until 2027

Franchise Brands has announced that it does not anticipate listing on the Main Market of the London Stock Exchange until Q3/Q4 2027, following inquiries from shareholders. The decision to delay is contingent on the status of AIM and potential fiscal or regulatory changes, impacting the company’s strategic planning and potentially affecting stakeholders’ expectations.

The most recent analyst rating on (GB:FRAN) stock is a Buy with a £300.00 price target. To see the full list of analyst forecasts on Franchise Brands stock, see the GB:FRAN Stock Forecast page.

Franchise Brands Grants Share Options to CFO

Franchise Brands has granted an option over 180,000 Ordinary Shares to its CFO, Andrew Mallows, under its Employee Share Option Plan. The option is contingent on meeting specific performance criteria related to earnings per share growth over the next three years. This grant is part of an annual share option allocation to senior employees, highlighting the company’s strategy to incentivize performance and align management interests with shareholder value.

The most recent analyst rating on (GB:FRAN) stock is a Buy with a £300.00 price target. To see the full list of analyst forecasts on Franchise Brands stock, see the GB:FRAN Stock Forecast page.

Franchise Brands Reports Resilient H1 2025 Performance Amid Challenging Conditions

Franchise Brands plc reported a resilient performance in the first half of 2025, with system sales increasing by 2.5% to £209.4m and profit before tax rising by 9.6% to £11.7m. Despite challenging macroeconomic conditions, the company benefited from international diversification and strong cash generation, which supported deleveraging and increased adjusted earnings per share by 7.8%. The company is progressing with strategic initiatives, including the integration of major acquisitions and the implementation of Group-wide technology projects, to strengthen its business for future growth. The outlook for the second half remains cautious, with expectations for adjusted EBITDA to be similar to 2024, while strong cash flow generation continues to support investment and debt reduction.

The most recent analyst rating on (GB:FRAN) stock is a Buy with a £300.00 price target. To see the full list of analyst forecasts on Franchise Brands stock, see the GB:FRAN Stock Forecast page.

Franchise Brands to Present Interim Results via Investor Meet Company

Franchise Brands plc announced that its Executive Chairman, Stephen Hemsley, and Group CEO, Peter Molloy, along with the management team, will present the company’s interim results on August 1, 2025, via the Investor Meet Company platform. This presentation is open to existing and potential shareholders, allowing them to submit questions before and during the event. This initiative aims to enhance transparency and engagement with investors, potentially strengthening the company’s market position and stakeholder relations.

The most recent analyst rating on (GB:FRAN) stock is a Buy with a £300.00 price target. To see the full list of analyst forecasts on Franchise Brands stock, see the GB:FRAN Stock Forecast page.

Franchise Brands to Announce Interim Results for H1 2025

Franchise Brands plc announced it will release its interim results for the six months ending June 30, 2025, on July 30, 2025. The company will hold a presentation for analysts and investors, indicating a commitment to transparency and engagement with stakeholders, potentially impacting its market perception and investor confidence.

The most recent analyst rating on (GB:FRAN) stock is a Buy with a £300.00 price target. To see the full list of analyst forecasts on Franchise Brands stock, see the GB:FRAN Stock Forecast page.

Franchise Brands Joins FTSE AIM UK 50 Index

Franchise Brands plc has been included in the FTSE AIM UK 50 Index, marking a significant milestone in its growth journey. This inclusion reflects the company’s substantial expansion since its IPO in 2016, now boasting a market capitalization of nearly £300 million. The company is committed to further growth through its ‘One Franchise Brands’ initiative, aiming to integrate and maximize opportunities across its brands, thereby delivering sustainable growth for stakeholders.

The most recent analyst rating on (GB:FRAN) stock is a Buy with a £300.00 price target. To see the full list of analyst forecasts on Franchise Brands stock, see the GB:FRAN Stock Forecast page.

Franchise Brands PLC Announces Change in Shareholder Voting Rights

Franchise Brands PLC, a UK-based company, announced a change in its shareholder voting rights as Swedbank Robur Fonder AB has acquired or disposed of voting rights, crossing the 3% threshold. This change in voting rights, effective from May 27, 2025, could impact the company’s shareholder dynamics and influence its decision-making processes.

The most recent analyst rating on (GB:FRAN) stock is a Buy with a £300.00 price target. To see the full list of analyst forecasts on Franchise Brands stock, see the GB:FRAN Stock Forecast page.

Franchise Brands Enhances Trading Liquidity with SETS Transition

Franchise Brands plc announced the transition of its share trading on AIM from the London Stock Exchange’s SETSqx to SETS, effective May 19, 2025. This move aims to enhance liquidity for investors by providing access to traditional order book trades and two-way quotes from market makers, potentially impacting the company’s market positioning and offering improved trading conditions for stakeholders.

The most recent analyst rating on (GB:FRAN) stock is a Buy with a £300.00 price target. To see the full list of analyst forecasts on Franchise Brands stock, see the GB:FRAN Stock Forecast page.