Elcano Franchise Fund 1 - Clearing Pool Class Units presentation

ELCANO FRANCHISE FUND CLEARING POOL UNITS

Commercial-In-Confidence Copyright©Elcano Holdings Pty Ltd

Fund Purpose

• Elcano Franchise Fund 1 LP – providing funding to franchisees of some of Australia’s top franchise systems.

• Clearing Pool Class Units – the initial placement pool behind the Franchise Marketplace (www.franchisemarket.co), from which funding is securitised to Special Purpose Vehicle (SPV) class units.

http://www.franchisemarket.co/


Fund Purpose

10 Million Clearing Pool Units

500,000 Franchisee A class Units

Franchisee A

P & I @10%

Investor

P & I @ 9%

Buy debt (as units) @ 3.25%

discount


Investor Benefits

• Quasi Fixed Interest investment;• Enhanced risk management strategy;• Hybrid Capital Model; and• Franchise Marketplace

• Return on Investment;• Payments frequency;• Lower fee structure;• Supporting Australian early-stage businesses; and• Elcano Team.


Elcano Franchise Fund 1

Low: where debt is able to convert

to SPV units.Moderate*

9.25% 7.5% - 9.0%*

Paid Quarterly Paid Monthly

4 years1 4 - 5.5 years*

High Low to High*

1. With the ability to extend to 5.5 years. * Each SPV class of units will have its own terms and profile.# Estimate.


Genuine VC/PE

Elcano Franchise Fund




Low: 1% Entry, 1% investee

payments, 1.25 - 2.5% RCH

Low: 1% Entry, 1% investee payments

Moderate: permitted and possible if a

secondary market is established

Moderate: permitted and possible if a

secondary market is established

Low: this is a once-off investment pool of only 10 million

units

High: new SPV units via Franchise Marketplace

Moderate: via residual capital

holdingNot applicable

Pooled investments Investor selection


Full model, notes and assumptions should be considered and are available from Elcano Capital

Elcano Franchise Fund 1 Year 1 Year 2 Year 3 Year 4 Year 5INCOMEInvestment 1,000,000- Principal 165,830 181,386 198,401 217,013 218,392 Interest 83,270 67,714 50,699 32,088 9,950 Residual Capital Holding - - - - 30,000 Total Income 249,100 249,100 249,100 249,100 258,342 1,254,743 EXPENSEEntry Fee 10,000 - - - - Facilitation Fee 9,252 7,524 5,633 3,565 1,106 Residual Capital Hoding Fee - - - - 15,000

Total Fees 19,252 7,524 5,633 3,565 16,106 52,080 1,202,663

VC Industry StdINCOMEInvestment 1,000,000- - - - - Interest - - - - - Sale - - - - 1,275,389 Total Income - - - - 1,275,389 1,275,389 EXPENSEManagement Fee 20,000 20,000 20,000 20,000 20,000 Carried Interest - - - - 55,078

Total Fees 20,000 20,000 20,000 20,000 75,078 155,078 1,120,311



Board

Graham Hart AMChairman

Darren LelliottManaging Director

Stephen RasmussenDirector

Nicole OttMarketing & Sales Director

Elcano Vs. Other VCPE

David GowDirector


Elcano Franchise Fund 1 LP• Elcano Capital LP – Australian domiciled

fund manager;• Operated by Elcano Pty Ltd - AFS licence

462624;• EFF1 is conditionally registered VCLP with

AusIndustry;• Compliant to receive mandatory $500K

VC/PE investment for SIV (industry projects is worth $350m p.a.)



• 1,160 Franchise Systems;• $144 billion sales turnover;• 14% GDP;• Employ 461,000 people;• Only 1.5% (av) of franchisees in dispute with

franchisor;• Sector average growth 7.79% p.a.;• 16 industry categories;• Franchisees outperform company stores 5 – 15%

revenue, 10% lower wage costs*.

Aust Franchise Sector

* Business Review Weekly, Franchisees trounce company-owned stores in major study, 28/3/14


• Funding• 2nd largest industry challenge• 5% (app. 60) bank funding arrangement

Aust Franchise Sector


Franchise Systems

Franchisee Assessment 30%•Track record

•Net asset position•Training/education

Franchise System Assessment 70%•Only Tier 1 & 2

Franchisors•Proven business model, adequate funding coverage•Robust franchisee

assessment, training, support.


Franchise Systems


• Information Memorandum with Application Form• Minimum $500k – Maximum $3 million*• 5% draw-down on application• Residual draw-down ASAP

Applications

CLEARING POOL CLASS UNITS

* Flexible

For further information please contact:Darren Lelliott (Managing Director)

Mobile: 0431 775 252 [email protected]

mailto:[email protected]