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Franchise Brands (GB:FRAN)
:FRAN
UK Market

Franchise Brands (FRAN) AI Stock Analysis

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GB

Franchise Brands

(LSE:FRAN)

Rating:75Outperform
Price Target:
171.00p
▲(11.40%Upside)
Franchise Brands' strong financial performance and positive corporate events are the most significant factors driving the score. Technical indicators are supportive but suggest caution. The stock's valuation is a potential concern, tempering the overall optimism.
Positive Factors
Market Position
Franchise Brands has delivered a resilient performance with record system sales in all key divisions despite challenging macroeconomic conditions.
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
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 Sectors
Pirtek has seen a gradual improvement in its more cyclical sectors with signs of potential larger project work coming later in the year.
Financial Performance
Adj. EBITDA is expected to be very marginally below the current consensus range, leading to a slight trim in the forecast.
Forecast Adjustments
The group remains optimistic that FY25E consensus is achievable despite the realisation of group-wide efficiencies and anticipated pick-up in higher value work in certain markets.

Franchise Brands (FRAN) vs. iShares MSCI United Kingdom ETF (EWC)

Franchise Brands Business Overview & Revenue Model

Company DescriptionFranchise Brands (FRAN) is a multi-brand franchisor based in the United Kingdom, specializing in building market-leading franchise businesses in the consumer and business services sectors. The company owns a diverse portfolio of franchise brands, enabling it to capitalize on cross-selling opportunities and operational synergies. Its core services include providing support, training, and resources to franchisees, helping them grow and succeed in their respective markets.
How the Company Makes MoneyFranchise Brands makes money primarily through franchise fees and royalty payments from its network of franchisees. Franchise fees are typically paid upfront by franchisees for the right to operate under one of the company's brand names, while ongoing royalties are based on a percentage of franchisees' sales. Additionally, the company may earn revenue from selling products and services to franchisees, as well as from providing marketing, technology, and operational support. Strategic partnerships and acquisitions also play a role in expanding its portfolio and increasing revenue opportunities.

Franchise Brands Financial Statement Overview

Summary
Franchise Brands has shown robust revenue growth and strong profit margins. The balance sheet indicates financial stability with moderate leverage, and efficient cash flow management supports future growth. However, there is room for improvement in return on equity.
Income Statement
85
Very Positive
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
78
Positive
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
80
Positive
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 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
139.21M121.27M92.73M57.69M49.29M
Gross Profit
83.32M59.07M30.79M21.93M20.93M
EBIT
16.97M10.87M8.42M5.84M3.98M
EBITDA
32.81M23.01M14.25M5.87M5.88M
Net Income Common Stockholders
7.28M3.04M8.13M4.23M2.79M
Balance SheetCash, Cash Equivalents and Short-Term Investments
12.92M12.28M10.80M9.05M13.20M
Total Assets
373.30M382.44M132.44M67.27M68.55M
Total Debt
87.98M94.56M2.46M2.53M8.24M
Net Debt
75.06M82.28M-8.34M-6.52M-4.96M
Total Liabilities
154.74M168.05M29.40M19.94M24.71M
Stockholders Equity
218.56M214.39M103.04M47.33M43.84M
Cash FlowFree Cash Flow
25.02M16.89M6.27M5.12M4.46M
Operating Cash Flow
28.16M19.95M7.73M7.27M5.24M
Investing Cash Flow
-2.71M-51.44M2.56M-3.02M-779.00K
Financing Cash Flow
-24.72M33.11M-8.74M-8.40M7.06M

Franchise Brands Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price153.50
Price Trends
50DMA
143.07
Positive
100DMA
142.49
Positive
200DMA
150.78
Negative
Market Momentum
MACD
2.55
Negative
RSI
52.23
Neutral
STOCH
58.59
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:FRAN, the sentiment is Neutral. The current price of 153.5 is above the 20-day moving average (MA) of 150.14, above the 50-day MA of 143.07, and above the 200-day MA of 150.78, indicating a neutral trend. The MACD of 2.55 indicates Negative momentum. The RSI at 52.23 is Neutral, neither overbought nor oversold. The STOCH value of 58.59 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for GB:FRAN.

Franchise Brands Peers Comparison

Overall Rating
UnderperformOutperform
Sector (66)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
75
Outperform
£295.54M40.613.36%1.69%14.79%165.03%
73
Outperform
£195.24M22.8045.84%4.01%12.22%7.48%
GBRWS
72
Outperform
£332.09M7.025.03%22.27%-2.13%
GBRST
68
Neutral
£347.10M27.745.32%0.79%-0.65%
GBCPI
66
Neutral
£285.30M3.8249.03%-10.33%
66
Neutral
$4.51B12.295.40%3.67%4.15%-12.21%
GBBEG
64
Neutral
£174.90M71.573.11%2.56%13.88%512.00%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
GB:FRAN
Franchise Brands
150.00
-23.14
-13.36%
GB:BEG
Begbies Traynor
107.50
8.88
9.00%
GB:RWS
RWS Holdings
90.70
-95.10
-51.18%
GB:CPI
Capita plc
260.00
44.30
20.54%
GB:RST
Restore
259.00
-1.04
-0.40%
GB:KEYS
Keystone Law Group Plc
618.00
-34.51
-5.29%

Franchise Brands Corporate Events

Regulatory Filings and Compliance
Franchise Brands PLC Announces Change in Shareholder Voting Rights
Neutral
May 28, 2025

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.

Delistings and Listing Changes
Franchise Brands Enhances Trading Liquidity with SETS Transition
Neutral
May 19, 2025

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.

Shareholder MeetingsBusiness Operations and StrategyFinancial Disclosures
Franchise Brands Secures Shareholder Support at AGM
Positive
May 7, 2025

Franchise Brands plc announced that all resolutions at its Annual General Meeting were passed, reflecting strong shareholder support. The resolutions included the re-election of key board members and the approval of financial statements, which underscores the company’s stable governance and strategic direction, potentially strengthening its market position and stakeholder confidence.

Business Operations and StrategyFinancial Disclosures
Franchise Brands PLC Shows Resilience Amid Market Challenges
Positive
May 7, 2025

Franchise Brands PLC reports resilient demand for its essential services and signs of market improvement in its Q1 trading update. Despite challenging macroeconomic conditions, the company has seen growth in system sales, particularly in its Pirtek and Filta North America divisions, and is making progress with strategic initiatives like ‘One Franchise Brands’ to enhance sales and operational efficiency. The company is also diversifying into growth markets to reduce sector dependency.

Other
Franchise Brands Directors Increase Shareholdings
Positive
Apr 9, 2025

Franchise Brands PLC announced that two of its directors, Stephen Hemsley and Nigel Wray, have each purchased 15,000 ordinary shares at 137.5 pence per share. This transaction reflects a significant vote of confidence in the company’s future prospects by its leadership, potentially strengthening investor trust and enhancing the company’s market position.

Business Operations and Strategy
Franchise Brands Directors Increase Shareholdings, Signaling Confidence in Growth
Positive
Apr 8, 2025

Franchise Brands PLC announced that two of its directors, Stephen Hemsley and Nigel Wray, have each purchased 25,000 ordinary shares at 134 pence per share. This move increases their stakes in the company, with Hemsley now holding 11.78% and Wray 8.26% of the issued share capital. This acquisition reflects the directors’ confidence in the company’s strategic direction and potential for growth, potentially strengthening its market position and signaling positive prospects to stakeholders.

Business Operations and Strategy
Franchise Brands Directors Increase Shareholdings
Positive
Apr 7, 2025

Franchise Brands PLC announced that two of its directors, Stephen Hemsley and Nigel Wray, have each purchased 25,000 ordinary shares in the company at an average price of 137.1 pence per share. This transaction underscores the directors’ confidence in the company’s growth prospects and could positively influence investor sentiment, potentially impacting the company’s market position and shareholder value.

Regulatory Filings and Compliance
Franchise Brands PLC Announces Change in Voting Rights
Neutral
Apr 4, 2025

Franchise Brands PLC, a UK-based company, has announced a change in its voting rights structure due to an acquisition or disposal of voting rights. Rathbones Investment Management Ltd and Investec Wealth & Investment Limited, both based in London, are involved in this notification. The voting rights attached to shares have decreased slightly from 5.040800% to 4.997900%, indicating a minor shift in shareholder influence. This adjustment may affect the company’s governance dynamics but remains within a stable range, suggesting limited immediate impact on its operations or market positioning.

Business Operations and StrategyFinancial Disclosures
Franchise Brands PLC Announces Live Investor Presentation for 2024 Financial Results
Positive
Apr 2, 2025

Franchise Brands PLC announced a live investor presentation scheduled for April 9, 2025, to discuss its financial results for the year ending December 31, 2024. The presentation, led by key executives, is open to current and potential shareholders, emphasizing the company’s commitment to transparency and stakeholder engagement. This initiative reflects Franchise Brands’ strategic focus on growth and market leadership, potentially enhancing its industry positioning and stakeholder relations.

Shareholder MeetingsFinancial Disclosures
Franchise Brands Releases 2024 Annual Report and AGM Notice
Neutral
Apr 1, 2025

Franchise Brands plc has published its Annual Report and Accounts for the year ending December 31, 2024, which are now accessible on the company’s website. Additionally, materials for the upcoming Annual General Meeting on May 7, 2025, have been distributed to shareholders. This publication is a routine part of the company’s operations, providing transparency and maintaining shareholder engagement, which is crucial for its continued growth and market presence.

Business Operations and Strategy
Franchise Brands Director Increases Shareholding, Signaling Confidence in Growth
Positive
Mar 31, 2025

Franchise Brands PLC announced that Louise George, an Independent Non-Executive Director, has purchased 50,000 ordinary shares, increasing her total shareholding to 150,000 shares, which represents 0.077% of the company’s voting rights. This transaction reflects confidence in the company’s strategic direction and may positively influence stakeholder perception, highlighting the commitment of its leadership to the company’s growth and market position.

Executive/Board ChangesBusiness Operations and StrategyFinancial Disclosures
Franchise Brands Achieves Record Sales and Strengthens Leadership Amid Challenging Conditions
Positive
Mar 27, 2025

Franchise Brands PLC reported a strong financial performance for the year ending December 2024, with a 20% increase in system sales and a 16% rise in adjusted EBITDA, despite challenging macroeconomic conditions. The company launched the ‘One Franchise Brands’ initiative to integrate its operations, enhance sales, and improve efficiency. The appointment of a new CEO and other leadership roles aims to strengthen the company’s strategic execution. The Group’s geographic diversification and focus on essential services have positioned it well for future growth, with an optimistic outlook for 2025.

Financial Disclosures
Franchise Brands to Announce Year-End Financial Results
Neutral
Mar 17, 2025

Franchise Brands plc announced it will release its final results for the year ending December 31, 2024, on March 27, 2025. This announcement is significant as it provides insights into the company’s financial performance and strategic positioning, potentially impacting stakeholders’ perceptions and the company’s market standing.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.