Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

Press Release Archive

Franchise Services of North America Inc. Announces Completion of Business Combination

News Release - December 1, 2006

SXV-Trading Symbol: FSN (formerly RAW)

(CALGARY, ALBERTA) FRANCHISE SERVICES OF NORTH AMERICA INC. (“FSNA” or the “Company”) (formerly known as Rent-a-Wreck Capital Inc.) announces that it has completed a business combination transaction first announced on October 13, 2006 resulting in the combination of the Company with U-Save Auto Rental of America, Inc. (“U-Save”), a privately held Mississippi company, based in Jackson, Mississippi. The transaction has not yet received final approval of the TSX Venture Exchange (“TSX-V”).

The transaction resulted in (prior to giving effect to the concurrent private placements discussed below), the former shareholders of U-Save holding 94.25% of the outstanding shares of FSNA, and the shareholders of the Company prior to the completion of the transaction holding 5.75% of the outstanding shares of FSNA. The transaction was approved at a Special Meeting of holders of common shares of the Company held on November 30, 2006. In connection with the transaction, shareholders also approved a consolidation of the Company’s common shares on a 4.0785967 for-one-basis (effective November 30, 2006) and a change in the name of the Company from “Rent-A-Wreck Capital Inc.” to “Franchise Services of North America Inc.”. The transaction has received all necessary regulatory approvals other than the final approval of the TSX-V.

Upon completion of the transaction on November 30, 2006, Thomas P. McDonnell, III, of Madison, Mississippi, and Sanford Miller, of Ormond Beach, Florida, acquired beneficial ownership over 22,685,635 common shares and 16,682,686 common shares, respectively, of the Company, representing 40.96% and 30.12%, respectively, of the issued and outstanding common shares of the Company. Messrs. McDonnell and Miller, who were appointed as Co-Chief Executive Officers of the Company upon completion of the transaction, were previously the principal beneficial shareholders of U-Save. The common shares of the Company that were acquired by Messrs. McDonnell and Miller were issued from treasury. Neither Mr. McDonnell nor Mr. Miller previously held any common shares of the Company and each participated in the transaction for investment purposes.

Concurrent Private Placements

In connection with the business combination transaction, FSNA successfully closed two concurrent private placements led by, respectively, Blackmont Capital Inc. and Meridian Merchant Capital Canada Ltd., for gross proceeds of $3.5 million. The proceeds of these private placements will be used to expand the Rent-A-Wreck brand in Canada, introduce U-Save into Canada, retire debt of FSNA, and expand its marketing and sales activities.

Board of Directors and Management Team

FSNA is led by an experienced board and management team comprised of the following individuals:
Board of Directors:
Sanford Miller, Tom McDonnell, Dave Forseth, Phil DeLeon, Vicki Pyne
Senior Management Team:
Sanford Miller - Co-Chief Executive Officer
Tom McDonnell - Co-Chief Executive Officer
Robert M. Barton - Executive Vice President & Chief Operating Officer
O. Kendall Moore - Vice President, General Counsel & Secretary
Henri Lefebvre - Chief Accounting Officer & Canadian General Manager
Ashley Chambliss - Controller, US Operations
Sanford Miller , Co-Chief Executive Officer and a Director. Mr. Miller joined U-SAVE® in December, 2003 as Co-Chief Executive Officer. Mr. Miller also serves as Manager of Basin Street Partners, LLC, a private equity firm promoting entrepreneurial activities. Previously, Mr. Miller was Chairman of the Board of Directors and CEO of Budget Group, Inc., the holding company for Budget Rent A Car Corporation and related subsidiaries. He served in this capacity from 1997 until November, 2002, at which time he left to be employed on a full-time basis with Basin Street Partners. Mr. Miller has served as past President of the American Car Rental Association and Chairman of the Budget RAC Corporate Licensee Advisory Board. Mr. Miller is resident in Ormond Beach, Florida.

Thomas P. McDonnell, III , Co-Chief Executive Officer and a Director. Mr. McDonnell has been President of Private Investment Management, Inc., in Jackson, Mississippi since 1990. During the same period, he has served as President and Director of LeFleur Transportation of Jackson, Inc. and its affiliates. Since 1994, he has been a U-SAVE® franchisee, and he currently operates two U-SAVE® franchises in the Jackson area, and one in Myrtle Beach, South Carolina. Mr. McDonnell became Chief Executive Officer and a director of U-SAVE® in 1996 and served as President from 1999 to 2003, and again from September, 2005 to September, 2006. Mr. McDonnell is resident in Madison, Mississippi.
Dave Forseth , Director. Mr. Forseth previously served as the CEO and Chairman of the Board of the Company. In addition, he has served as President and Chief Executive Officer of Practicar Systems Inc., a wholly owned operating subsidiary of the Company, since October, 1997. Mr. Forseth has agreed that following his resignation from Practicar, he will act as a consultant to FSNA. Mr. Forseth is resident in Calgary, Alberta.

Phil DeLeon , Director.
Mr. DeLeon has been President of OnX Enterprise Solutions, Inc., a company listed on the Toronto Stock Exchange (TICKER: ON), since January, 2000. OnX is a leading IT services organization focusing on delivering consulting, web design, infrastructure, integration and outsourcing solutions. Mr. DeLeon is resident in Toronto, Ontario.

Vicki Pyne , Director. Ms. Pyne is the Senior Vice President of Cigna Health Care, a subsidiary of Cigna Corporation (NYSE: CL) and has been in this role since May, 2006. From September, 2002 to May, 2006, Ms. Pyne served as Vice President, Human Resources-Asia Pacific for Cigna International, and from September, 1998 to July, 2002, Ms. Pyne was the Senior Vice President-Human Resources for Budget Group, Inc. Ms. Pyne is resident in Hartford, Connecticut.

Robert M. Barton , Executive Vice President, Chief Operating Officer. In September of 2006, Mr. Barton became U-Save's Chief Operating Officer. Mr. Barton has served as Executive Vice President of USAVE® since August, 2005. In July of 2004, Mr. Barton joined U-Save Auto Rental of America, Inc. as Vice President, Sales and Marketing. From June, 2003 to April, 2006, Mr. Barton was part owner and Executive Vice President of Van Rental Services, LLC, a U-Saveâ franchise located in Tampa, Florida. From July, 2000 to June, 2003, Mr. Barton served as Executive Director of Dollar Thrifty Automotive Group in Tampa, Florida. From May 1985 to July 2000, he was Vice President of Budget Group, Inc., the holding Company for Budget Rent A Car Corporation and related subsidiaries, headquartered in Scottsdale, Arizona. Mr. Barton is resident in Lithia, Florida.

O. Kendall Moore , Vice President, General Counsel and Secretary. Mr. Moore joined U-Save® in May, 2000 as General Counsel and Secretary. From 1987 to 2000, he was employed by Butler, Snow, O’Mara, Stevens & Cannada, PLLC, Mississippi’s largest law firm, where he served as U-Save’s primary external counsel. Mr. Moore is resident in Madison, Mississippi.

Henri Lefebvre , Chief Accounting Officer & Canadian General Manager. Mr. Lefebvre served as the Company’s Chief Financial Officer and Secretary from June, 1999 to November 30, 2006. He has been a Principal of Facto Management Inc., a private management consulting firm, since 1989, and Chief Financial Officer and Secretary of a junior public petroleum company from 1988 to 1994. He obtained his Certified General Accountant (CGA) designation in 1980. Mr. Lefebvre is resident in Calgary, Alberta.

Ashley Chambliss , Controller, US Operations. In March, 2001, Ms. Chambliss joined U-Save as its Controller. From February, 1999 to February, 2001, Ms. Chambliss served as controller of a subsidiary of the Mississippi Hospital Association. From December, 1997 to February, 1999, Ms. Chambliss was a Supervising Senior Accountant with KPMG Peat Marwick, LLC. Ms. Chambliss obtained her Certified Public Accountant designation in March, 1997. Ms. Chambliss is resident in Madison, Mississippi.

Resumption of Trading

Trading in the shares of RAWC will remain halted until the TSX-V has confirmed that the documentation requirements of Policy 5.2 of the exchange have been met. However, the Company anticipates that, subject to receipt of final approval of the TSX-V, trading will resume on or about, December 5, 2006.

Sponsorship

Blackmont Capital Inc. acted as sponsor of the transaction.

Follow-on Prospectus Filing

The Company is also announcing that it has engaged Blackmont Capital Inc. to act as agent for a proposed marketed public equity offering of common shares of FSNA (the “Offering”). Gross proceeds from the Offering, anticipated to be between $4 million and $8 million, will be used primarily for debt reduction, growth of the Company’s business in the airport and neighborhood sectors of the car rental market and growth of the U-SAVE® brand in Canada. The Company has filed a preliminary short form prospectus dated December 1, 2006 with the securities regulatory authorities in the provinces of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario and Nova Scotia in connection with the Offering.

Closing of the Offering is expected to occur on or about December 31, 2006 and is subject to certain conditions, including but not limited to, receipt of all necessary securities regulatory approvals (including the approval of the TSX Venture Exchange).

The securities being offered have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States in the absence of registration or an applicable exemption from the registration requirements. This press release does not constitute an offer to sell or the solicitation of an offer to purchase securities in the United States.

About the Company

FSNA is a publicly traded company on the TSX-V.
Through its two operating subsidiaries, U-Save Auto Rental of America, Inc. and Practicar Systems Inc., the Company grants franchises for the operation of vehicle rental stores under the U-SAVE® and Rent-AWreck ® brands. FSNA has approximately 310 locations located throughout Canada and the United States encompassing a combined fleet of approximately 9,500 vehicles. In addition, through FSNA Financial, its financial services subsidiary, the Company co-ordinates insurance services with approved insurance carriers for liability and physical damage coverage for approximately 5,500 vehicles within the U-SAVE® system. In addition, U-SAVE® provides similar insurance products and other services to over 950 independent auto rental companies comprising an additional 10,585 fleet vehicles under coverage.

The Company’s head office is located at Suite 204, 7710 – 5th Street S.E., Calgary, Alberta, T2H 2L9 and its registered office is located at 3700, 400 – 3rd Ave. S.W., Calgary, Alberta, T2P 4H2. The Company’s phone number is (403) 259-6666 and its facsimile number is (403) 259-6776. FSNA’s Canadian website is located at www.rentawreck.ca and its United States website is located at www.usave.com.

FOR ADDITIONAL INFORMATION:

Tom McDonnell/Sandy Miller
Co-Chairman/Co-CEO
Franchise Services of North America Inc.
(601) 713-4333 / (386) 238-7035

The TSX Venture Exchange has in no way passed upon the merits of the prospectus financing and has neither approved nor disapproved the contents of this press release.