FRG - Mini-Berkshire In The Making At Franchise Group: Strong Organic Growth Accretive M&A To Drive Stock Price

• Operational excellence and a superb M&A track record have lifted EBITDA per share 3.5x since mid-2019 when current management took over.
• Franchise Group is experiencing strong organic growth with a huge runway ahead. This, along with continuing accretive M&A, will drive robust 20%+ EBITDA/share growth for the next decade.
• The company refinanced 11% debt to 6.2% in January 2021. The company is substantially more credit worthy today, and another credit upgrade/rate reduction in 2022 seems inevitable.
• CEO Brian Kahn is a highly successful private equity fund manager who has decided to make Franchise Group his primary investment vehicle, putting a huge fraction of his net worth into the stock.
• The company is superbly managed, rapidly growing, moderately levered, and the stock is up 5x since 2019 when Kahn became CEO. Franchise Group is nonetheless available at less than 8x my 2022 FCF estimate.

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