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Franchise Services of North America Inc. announces US$6.5 million private placement

Franchise Services of North America Inc. announces US$6.5 million private 
placement 
/THIS PRESS RELEASE IS NOT FOR DISTRIBUTION TO ANY UNITED STATES NEWSWIRE 
SERVICES OR OTHERWISE FOR DISTRIBUTION IN THE UNITED STATES. ANY FAILURE TO 
COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF UNITED STATES 
SECURITIES LAW./ 
TSX-V Trading Symbol: FSN 
CALGARY, July 8, 2013 /CNW/ - FRANCHISE SERVICES OF NORTH AMERICA INC. ("FSNA" 
or the "Company") (FSN.V) today announced that it intends to conduct a 
non-brokered private placement (the "Private Placement") of up to 500,000 
shares of series B preferred stock in the capital of the Company ("Series B 
Preferred Shares") at a subscription price of U.S. $13.00 per share, which is 
equal to CDN $13.74 based on the closing rate of exchange on July 5, 2013 of 
U.S. $1 = CDN $1.0567 as provided by the Bank of Canada, for gross proceeds of 
up to U.S. $6.5 million. Each Series B Preferred Share will be convertible, in 
whole or in part, into 39.25 shares of common stock in the capital of the 
Company ("Common Shares") at a conversion price per Common Share of U.S. 
$0.33, which is equal to CDN $.35 based on the closing rate of exchange on 
July 5, 2013. Holders of Series B Preferred Shares will be entitled to 
convert their Series B Preferred Shares into Common Shares following the 
earlier of: (i) November 3, 2014 or (ii) the date of a change of control of 
the Company. The Company may additionally compel conversion of the Series B 
Preferred Shares: (i) in connection with a change of control of the Company or 
(ii) five years less a day from the closing date of the Private Placement. 
The right to convert the Series B Preferred Shares will expire five years from 
the closing date of the Private Placement. The Series B Preferred Shares 
will be non-voting prior to their conversion. 
Net proceeds of the Private Placement will be used for general working capital 
purposes. The Private Placement is expected to close on or about July 12, 
2013. 
In accordance with the Rules of the TSX Venture Exchange, FSNA announces that 
insiders of the Company will be subscribing for greater than 25% of the 
Private Placement. Thomas P. McDonnell, III, Chairman and Chief Executive 
Officer of the Company, intends to subscribe for up to 76,923 Series B 
Preferred Shares. Mr. McDonnell presently owns or controls 22,535,635 Common 
Shares, representing 35.87% of the issued and outstanding Common Shares. 
Boketo LLC intends to subscribe for up to 423,077 Series B Preferred Shares. 
Boketo LLC presently owns or controls 62,212,200 shares of series A preferred 
stock of the Company, representing all of the issued and outstanding series A 
preferred stock of the Company, and no Common Shares. 
The Private Placement will not result in the creation of any new insiders or 
control persons. No commission or finder's fee is payable in connection with 
the Private Placement. 
As Mr. McDonnell and Boketo LLC are each considered to be "related parties" of 
FSNA under Part 1.1 of Multilateral Instrument 61-101 ("MI 61-101"), their 
participation in the Private Placement constitutes a "related party 
transaction" within the meaning of MI 61-101. The board of directors of FSNA 
has determined that the Private Placement is exempt from the formal valuation 
and minority shareholder approval requirements of MI 61-101 as neither the 
fair market value of the subject matter of, nor the fair market value of the 
consideration for, the transaction, insofar as it involves related parties, 
exceeds 25% of FSNA's market capitalization calculated on the basis of its 
issued and outstanding Common Shares. 
A material change report in respect of the transaction was not filed 21 days 
in advance of the expected closing of the Private Placement. The shorter 
period was necessary in order to permit FSNA to close the Private Placement in 
a timeframe consistent with usual market practice for transactions of this 
nature. 
The Series B Peferred Shares and Common Shares issuable on conversion thereof 
will be subject to a hold period and restricted period from the date of 
issuance in accordance with the policies of the TSX Venture Exchange and 
applicable securities legislation. The securities offered will not be 
registered under the United States Securities Act of 1933 (the "Act") and may 
not be offered or sold in the United States absent registration or an 
applicable exemption from the registration requirements of the Act. 
The Private Placement remains subject to standard filing requirements and the 
receipt of approval from the TSX Venture Exchange. 
About FSNA 
FSNA is a publicly traded company listed on the TSX Venture Exchange. The 
Company and its subsidiaries own the following brands: Advantage Rent A Car 
("Advantage"), U-Save Car & Truck Rental®, U-Save Car Sales, Rent-A-Wreck of 
Canada, PractiCar, Auto Rental Resource Center ("ARRC"), Xpress Rent A Car and 
Peakstone Financial Services. 
Advantage is currently positioned as a brand, and targets consumers in the 
value-oriented segment of the U.S. rental car market. As of July 2013, 
Advantage is expected to operate from approximately 75 locations servicing 
airports and five additional satellite locations in hotels in Hawaii and Las 
Vegas and has a fleet of approximately 24,000 cars, ranging from economy cars 
to SUVs. Advantage primarily services the leisure segment of the rental car 
market and predominantly operates in key domestic leisure destinations, 
including California, Florida, Texas, Colorado, Hawaii and Arizona. 
U-Save, together with its subsidiary ARRC, has over 1,100 locations throughout 
the United States and is one of North America's largest franchise car rental 
companies. Having primarily serviced the local market for the past 30 years, 
the Company is expanding into the airport market with plans for the opening of 
airport locations in the top 30 markets in the United States and the major 
airports in Canada. U-Save currently services 28 airport markets in 11 
different states and 7 countries. U-Save Car Sales is an expansion of the 
U-Save brand into the car sales market, and provides goods and services to car 
sales operators looking to affiliate with a national brand. 
Practicar Systems Inc. (a wholly owned subsidiary of FSNA) owns the rights to 
the Rent-AWreck® and the PractiCar® trademarks for all of Canada. The 
Rent-A-Wreck® system operates a network of 69 franchise locations from 
coast-to-coast in Canada, providing a range of vehicle rental, leasing and 
sales options to its customers. The Rent-A-Wreck® system has been in 
continuous operation in Canada since 1976. 
Forward Looking Information 
Certain statements made in this news release are forward-looking in nature, 
including statements concerning the completion and timing of the Private 
Placement, the anticipated use of the net proceeds of the Private Placement 
and statements made with respect to Advantage's operations, including 
expectations as to the number of locations and size of fleet. The closing of 
the Private Placement could be delayed if FSNA is not able to obtain the 
necessary regulatory and stock exchange approvals on the timelines it has 
planned. The Private Placement will not be completed at all if these approvals 
are not obtained or if some other condition to the closing is not satisfied. 
Accordingly, there is a risk that the Private Placement will not be completed 
within the anticipated time or at all. The words "may", "could", "should", 
"would", "expect", "intend", "estimate", "anticipate", "believe", or "outlook" 
and similar expressions often identify forward-looking information. By their 
nature, forward-looking statements require FSNA to make assumptions and are 
subject to inherent risks and uncertainties. The forward-looking statements 
contained in this news release are based on certain key expectations and 
assumptions made by FSNA. Although FSNA believes that the expectations and 
assumptions on which the forward-looking statements are based are reasonable, 
undue reliance should not be placed on the forward-looking statements because 
FSNA can give no assurance that they will prove to be correct. FSNA's 
forward-looking statements are qualified in their entirety by these cautionary 
statements. In addition, the forward-looking statements are made only as of 
the date of this news release, and except as required by applicable securities 
law, FSNA undertakes no obligation to publicly update these forward-looking 
statements to reflect new information, subsequent events or otherwise. 
Neither TSX Venture Exchange nor its Regulation Services Provider (as that 
term is defined in the policies of the TSX Venture Exchange) accepts 
responsibility for the adequacy or accuracy of this release. 
For further information on FSNA or any of its operating subsidiaries  please 
contact: Thomas P. McDonnell, III Franchise Services of North America Inc. 
(601) 713-4333 
SOURCE: Franchise Services of North America Inc. 
To view this news release in HTML formatting, please use the following URL: 
http://www.newswire.ca/en/releases/archive/July2013/08/c5966.html 
CO: Franchise Services of North America Inc.
ST: Alberta
NI: AUT INS PVT  
-0- Jul/08/2013 14:01 GMT
 
 
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