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Brian Kahn
Franchise Group Inc
Brian Kahn was the Chief Executive Officer of Franchise Group Inc., a company that owns and operates franchised and franchisable businesses including Pet Supplies Plus, The Vitamin Shoppe, and Sylvan Learning.1 However, his tenure as CEO has recently come to an end amid significant developments and controversies:
Departure from Franchise Group
In January 2024, Brian Kahn stepped down from his position as CEO of Franchise Group Inc.45 This departure came just months after he led a leveraged buyout of the company, which was completed in August 2023.1
The Buyout Transaction
In September 2023, Kahn led a successful take-private acquisition of Franchise Group:
- The transaction had an enterprise value of approximately $2.6 billion.1
- A buyer group led by Kahn, consisting of the company's senior management team, acquired about 64% of Franchise Group's outstanding common stock.1
- The buyout was conducted in partnership with a consortium including B. Riley Financial, Inc. and Irradiant Partners.1
- As a result of this transaction, Franchise Group was delisted from the Nasdaq Global Select Market.1
Controversies and Legal Issues
Kahn's departure and the buyout transaction have been surrounded by controversy:
- His resignation came amid regulatory scrutiny, specifically queries from the Securities and Exchange Commission (SEC).45
- In July 2024, Franchise Group investors filed a lawsuit against Kahn and B. Riley Financial Inc., claiming shareholders were shortchanged in the $2.6 billion buyout.23
- The lawsuit alleges that Kahn and his allies used their control of the company to push through the $30-per-share buyout in 2023, which investors claim undervalued their shares.2
- There are also allegations of flawed proxy disclosures about who was behind the leveraged buyout.2
Other Controversies
- Kahn has been linked to the collapse of Prophecy Asset Management, which triggered a fraud probe by federal officials.2
- While Kahn has maintained he did nothing wrong and hasn't been charged, questions about his dealings with this unrelated hedge fund contributed to his stepping down as Franchise Group CEO.2
Brian Kahn's tenure at Franchise Group Inc. was marked by significant business moves, but ultimately ended in controversy and legal challenges. The full implications of these events are still unfolding as investigations and lawsuits proceed.
