Franchise Brands Regulatory News (FRAN)

16 September 2020

Franchise Brands plc

("Franchise Brands" or the "Company")

New Share Option Schemes, Grant of Share Options and Director Share Dealings

Franchise Brands (AIM: FRAN) announces that its Remuneration Committee yesterday approved the grant of options to employees and directors under two new incentive schemes, a Company Share Option Plan ("CSOP") and a Management Share Option Scheme. In addition, the Company has been notified of two non-financial movements in the holdings of shares held by two directors, as detailed at the end of this announcement.

Company Share Option Plan

The Company has established a new CSOP for employees and directors, which will enable them to acquire new ordinary shares of 0.5 pence each in the Company ("Ordinary Shares") subject to certain Company performance criteria being met. Similar to the Company's existing share option schemes, employees and directors are only able to exercise their options under the CSOP as follows:

1) as to 20 per cent. after reported fully diluted adjusted earnings per share ("EPS") achieves compound annual growth of 8 per cent. over each of the next three financial years;

2) as to 100 per cent. after reported fully diluted adjusted EPS achieves compound annual growth of 15 per cent. over each of the next three financial years; and

3) between 20 per cent. to 100 per cent. of their options on a sliding scale basis on EPS growth between the targets in 1) and 2) above.

The Company yesterday awarded a total of 1,622,136 options under the CSOP to the majority of employees of the Group, including 238,636 to five executive directors and two senior employees but which have an additional investment condition as detailed below. All these options are exercisable at the closing mid-market price on 14 September of 88 pence per Ordinary Share (the "Exercise Price") and the options expire on 15 September 2030 if not exercised.

The number of options granted to each director and senior employee under the CSOP at the Exercise Price has been determined as being two times the value of Ordinary Shares they have each agreed to acquire in the Company, either by acquiring existing Ordinary Shares in the market or, where this is not possible, through the issue of new Ordinary Shares by the Company at the then prevailing share price (and any such issue of new Ordinary Shares will be announced separately once the shares have been acquired), subject to a maximum of £30,000 of CSOP options each. These CSOP options will lapse to the extent that the requisite investment into Ordinary Shares has not been made by a pre-determined date (subject to limited exceptions approved by the Remuneration Committee).

Details of the options granted to directors under the CSOP are as follows:

Management Share Option Scheme

In addition to the above, the Company has awarded 181,818 options to three executive directors and one senior employee under a new unapproved "nil cost" Management Share Option Scheme ("Management Scheme"), which will enable them to acquire new Ordinary Shares at their nominal value of 0.5 pence each based on the value of Ordinary Shares they have agreed to acquire in the Company. Options granted under the Management Scheme have the same EPS conditions of exercise as the CSOP as set out above.

Similar to the grants to directors and senior employees under the CSOP, the number of options granted to each director and senior employee under the Management Scheme has been determined as being equal to the value of Ordinary Shares they have each agreed to acquire in the Company, either by acquiring existing Ordinary Shares in the market or where this is not possible, through the issue of new Ordinary Shares by the Company at the then prevailing share price (and any such issue of new Ordinary Shares will be announced separately once the shares have been acquired). Options under the Management Scheme will lapse to the extent that the requisite investment into Ordinary Shares has not been made by a pre-determined date (subject to limited exceptions approved by the Remuneration Committee).

Details of the options granted to directors under the Management Scheme are as follows:

Following the grant of all the CSOP options and Management Scheme options set out above, the Company now has options issued over a total of 5,753,302 new Ordinary Shares, representing 6.0 per cent. of the Company's issued share capital.

Other Director Share Dealings

The Company has been notified that Chris Dent, Chief Financial Officer, has transferred 26,207 Ordinary Shares to his SIPP and he remains the beneficial owner of those shares.

In addition, Stephen Hemsley, Executive Chairman, has entered into a share pledge for some Ordinary Shares but his total beneficial ownership of Ordinary Shares remains unchanged.

Details of both these transactions are set out in the requisite disclosure forms at the end of this announcement.

Enquiries:

About Franchise Brands plc

Franchise Brands is focused on building market-leading businesses in selected customer segments using primarily a franchise model. The Group currently has a combined network of over 430 franchisees across five franchise brands. Our focus is on established brands which can benefit from our shared support services, specialist sector expertise, management experience and group resources.

Franchise Brands' portfolio of market-leading service businesses grew in 2019 with the acquisition of Willow Pumps. The addition of Willow Pumps, a direct labour organisation, represented an important step in expanding Metro Rod and Metro Plumb's range of services to the commercial market.

The Group is organised into a B2B division comprised of Metro Rod, Metro Plumb and Willow Pumps, and a B2C division that incorporates ChipsAway, Ovenclean and Barking Mad. This divisional organisation of our brands is designed to provide a greater focus and structure to support the strategic development of our B2B and B2C brands.

Each of our brands are leaders in their respective markets and each brand has a long trading history. The combined trading history of all the Group's brands is over 125 years.

Franchise Brands plc employs some 260 people across three principal locations in Macclesfield, Kidderminster and Aylesford.

For further information, visit www.franchisebrands.co.uk.

Notification and public disclosure of transactions by persons discharging managerial responsibilities and persons closely associated with them