Benzinga | Nov 11, 2020 08:02AM EST

Franchise Group, Inc. Refranchises 47 Buddy's Locations For $35M And Signs A Development Deal For 20 Locations With Bebe Stores; Says Proceeds Will Be Used To Repay Debt

ORLANDO, Fla., Nov. 11, 2020 (GLOBE NEWSWIRE) -- Franchise Group, Inc. (NASDAQ:FRG) ("Franchise Group" or the "Company") today announced it has refranchised 47 Buddy's locations to bebe stores, inc. (OTC:BEBE) ("bebe") for $35 million. The agreement also includes a planned development schedule for bebe to open 20 new Buddy's locations.

Brian Kahn, CEO of Franchise Group stated, "We are pleased to partner with the founder and principals of bebe to grow the Buddy's business. This transaction is a good example of how Franchise Group can use refranchising company-owned units to simultaneously de-lever its balance sheet and create growth for its brands."

The Company intends to use the proceeds of this transaction to repay $35 million of its term loan. The impact of the refranchising agreement will reduce the Company's annual revenue by approximately $35 million and Adjusted EBITDA by approximately $6 million, excluding any future impact from the franchisee's new store openings.