Franchise Group Inc. (FRG) recently disclosed third-quarter earnings that fell below our expectations. We now expect lower profitability and weaker cash flow generation as well as for S&P Global Ratings-adjusted debt levels to stay higher than our previous expectations, all pressuring credit measures beyond our prior downgrade threshold. We lowered our issuer-credit rating on FRG to 'B-' from 'B'. At the same time, we lowered our issue-level rating on the company's second-lien term loan to 'CCC' from 'CCC+' and our 'B+' rating on the company's first lien term loan to 'B.' The negative outlook reflects our view that we expect the company to face continued operational challenges in the coming year. The negative outlook reflects that we could lower our
