| Item 7.01 | Regulation FD Disclosure. |
On May 10, 2023, the Company announced its entry
into an Agreement and Plan of Merger, dated as of May 9, 2023 (the “Merger Agreement”), by and among the Company, Freedom
VCM, Inc., a Delaware corporation (“Parent”), and Freedom VCM Subco, Inc., a Delaware corporation and wholly owned subsidiary
of Parent (“Merger Sub”), pursuant to which, upon the terms and subject to the conditions set forth therein, Merger Sub shall
merge with and into the Company, with the Company surviving the merger as a wholly owned subsidiary of Parent. The buyer group includes
members of the senior management team of the Company, led by Brian Kahn, the Company’s Chief Executive Officer, in financial partnership
with a consortium that includes B. Riley Financial, Inc. and Irradiant Partners. A copy of the press release is furnished as Exhibit 99.2
to this Current Report on Form 8-K and is incorporated by reference herein.
The information contained in Item 2.02 and Item 7.01 of this Current Report on Form
8-K, including Exhibit 99.1 and Exhibit 99.2 attached hereto, is being furnished and shall not be deemed “filed” for
purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the
liabilities of that Section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act
of 1933 or the Exchange Act, except as expressly set forth by specific reference in such filing.
Forward-looking Statements
This
Current Report on Form 8-K contains forward-looking statements. Forward-looking statements
include, without limitation, projections, predictions, expectations, or beliefs about future events or results and are not statements
of historical fact. Such statements may include statements regarding the completion of the proposed merger and the expected timing
of the completion of the proposed merger, the expected value provided to stockholders as a result of the proposed merger, the redemption
of the Company’s outstanding shares of preferred stock, the Company’s payment of dividends on its outstanding shares of common
stock and preferred stock, the management of the Company upon completion of the proposed merger and the Company’s operating and
strategic plans upon completion of the proposed merger. Such forward-looking statements are based
on various assumptions as of the time they are made, and are inherently subject to known and unknown risks, uncertainties and other factors
that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Forward-looking statements are often accompanied by words that convey projected
future events or outcomes such as “expect,” “believe,” “estimate,” “plan,” “project,”
“anticipate,” “intend,” “will,” “may,” “view,” “opportunity,”
“potential,” or words of similar meaning or other statements concerning opinions or judgment of the Company or its management
about future events. Although the Company believes that its expectations with respect to forward-looking statements are based upon reasonable
assumptions within the bounds of its existing knowledge of its business and operations, there can be no assurance that actual results,
performance, or achievements of the Company will not differ materially from any projected future results, performance or achievements
expressed or implied by such forward-looking statements. Actual future results, performance or achievements may differ materially from
historical results or those anticipated depending on a variety of factors, some of which are beyond the control of the Company, including,
but not limited to, the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement;
the inability to complete the proposed merger due to the failure to obtain stockholder approval for the proposed merger or the failure
to satisfy other conditions to completion of the proposed merger; risks related to disruption of management’s attention from the
Company’s ongoing business operations due to the proposed merger; unexpected costs, charges or expenses resulting from the proposed
merger; the Company’s ability to retain and hire key personnel in light of the proposed merger; certain restrictions during the
pendency of the proposed merger that may impact the company’s ability to pursue certain business opportunities or strategic transactions;
the ability of the buyers to obtain the necessary financing arrangements set forth in the commitment letters received in connection with
the proposed merger; potential litigation relating to the proposed merger that could be instituted the parties to the Merger Agreement
or their respective directors, managers or officers, including the effects of any outcomes related thereto; the effect of the announcement
of the proposed merger on the Company’s relationships with its franchisees and customers, operating results and business generally;
and the risk that the proposed merger will not be consummated in a timely manner, if at all. The Company refers you to the “Risk
Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections
of the Company’s Form 10-K for the fiscal year ended December 31, 2022, and comparable sections of the Company’s Quarterly
Reports on Form 10-Q and other filings, which have been filed with the SEC and are available on the SEC’s website at www.sec.gov.
All of the forward-looking statements made in this Current Report on Form 8-K are expressly
qualified by the cautionary statements contained or referred to herein. The actual results or developments anticipated may not be realized
or, even if substantially realized, they may not have the expected consequences to or effects on the Company or its business or operations.
Readers are cautioned not to rely on the forward-looking statements contained in this Current Report on Form 8-K.
Forward-looking statements speak only as of the date they are made and the Company does not undertake any obligation to update, revise
or clarify these forward-looking statements, whether as a result of new information, future events or otherwise, except as required by
applicable law.
Additional Information and Where to Find
It
This Current Report on
Form 8-K is not intended to and does not constitute an offer to sell or the solicitation of an offer to subscribe for or buy or an invitation
to purchase or subscribe for any securities or the solicitation of any vote or approval in any jurisdiction, nor shall there be any sale,
issuance or transfer of securities in any jurisdiction in contravention of applicable law. In connection with the proposed merger, the
Company intends to file relevant materials with the Securities and Exchange Commission (the “SEC”), including a proxy statement
on Schedule 14A (the “Proxy Statement”), and the Company and affiliates of Vintage
Capital Management, LLC intend to jointly file a transaction statement on Schedule 13E-3 (the “Schedule 13E-3”).
This communication is not a substitute for the Proxy Statement or any other document that the Company may file with the SEC or send to
its stockholders in connection with the proposed merger. STOCKHOLDERS OF THE COMPANY ARE ADVISED TO READ THE PROXY STATEMENT, THE SCHEDULE 13E-3 AND
ANY OTHER DOCUMENTS FILED BY THE COMPANY WITH THE SEC IN CONNECTION WITH THE PROPOSED MERGER BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION
ABOUT THE COMPANY AND THE BUSINESS TO BE CONDUCTED AT THE SPECIAL MEETING. All such documents, when filed, may be obtained free of charge
at the SEC’s website (http://www.sec.gov). These documents, once available, and the Company’s other filings with the SEC also
will be available free of charge on the Company’s website at www.franchisegrp.com.
Participants in the Solicitation
The Company and its directors
and executive officers may be deemed to be participants in the solicitation of proxies from the Company’s stockholders with respect
to the proposed merger. Information about the Company’s directors and executive officers and their ownership of the Company’s
common stock is set forth in the Company’s proxy statement on Schedule 14A filed with the SEC on April 7, 2023 and the Company’s
Annual Report on Form 10-K for the fiscal year ended December 31, 2022 filed with the SEC on February 28, 2023. To
the extent that such individual’s holdings of the Company’s common stock have changed since the amounts printed in the Company’s
proxy statement, such changes have been or will be reflected on Statements of Change in Ownership on Form 4 filed with the SEC. Other
information regarding the identity of the potential participants, and their direct or indirect interests in the proposed merger, by security
holdings or otherwise, will be set forth in the Proxy Statement and other materials to be filed with SEC in connection with the proposed
merger. Free copies of these materials may be obtained as described in the preceding paragraph.
