U.S.-based Franchise Group Inc. (FRG) plans to issue $650 million in senior secured notes to refinance its existing debt. The company operates and franchises multiple retail and services concepts, including value-focused furniture retailer American Freight, rent-to-own furniture provider Buddy's, nutritional supplement store The Vitamin Shoppe, and tax services provider Liberty Tax. We are assigning our 'B+' issuer credit rating to Franchise Group Inc. At the same time, we are assigning our 'B+' issue-level rating and '4' recovery rating to the company's proposed senior secured notes. The stable outlook reflects our expectation for improving EBITDA and cash flow generation as the company benefits from cost synergies from its recent acquisitions. The 'B+' rating reflects our assessment of the company's limited track
