Item 1.01. Entry into a Material Definitive Agreement.

Amendments to Term Loan Credit Agreement

On September 23, 2020, Franchise Group Intermediate Holdco, LLC, a Delaware limited liability company ("Lead Borrower") and an indirect subsidiary of Franchise Group, Inc., a Delaware corporation (the "Company"), Franchise Group New Holdco, LLC, a Delaware limited liability company ("Parent") and the direct parent of Lead Borrower, and various subsidiaries of Parent entered into an Amendment Number Three to Credit Agreement (the "Third Term Loan Amendment") with the Term Lenders (as defined below) party thereto, GACP Finance Co., LLC, as administrative agent (the "Term Administrative Agent"), and Kayne Solutions Fund, L.P., as collateral agent (the "Term Collateral Agent"), which amended that certain Credit Agreement, dated as of February 14, 2020 (the "Original Term Loan Credit Agreement", and the Original Term Loan Credit Agreement as amended by Amendment Number One to Credit Agreement, dated as of March 13, 2020, and Limited Waiver, Joinder and Amendment Number Two to Credit Agreement, dated as of May 1, 2020, the "Existing Term Loan Credit Agreement"), by and among Lead Borrower, as lead borrower, Parent, as a guarantor, various subsidiaries of Parent from time to time party thereto as borrowers or guarantors (together with Lead Borrower and Parent, the "Term Loan Loan Parties"), various lenders from time to time party thereto (the "Term Lenders"), the Term Administrative Agent and the Term Collateral Agent. On September 25, 2020, the Term Loan Loan Parties entered into an Amendment Number Four to Credit Agreement (the "Fourth Term Loan Amendment", and together with the Third Term Loan Amendment, the "Term Loan Amendments") with the Term Lenders, the Term Administrative Agent and the Term Collateral Agent, which amended the Existing Credit Agreement (as amended by the Third Term Loan Amendment) (the Existing Credit Agreement, as amended by the Term Loan Amendments, the "Term Loan Credit Agreement").

The Term Loan Amendments amended the Existing Term Loan Credit Agreement to, among other things, (i) facilitate the entry into the New ABL Credit Agreement (as defined below), (ii) permit sales of real property of the Term Loan Loan Parties and the use of the net proceeds therefrom to repay the obligations under the Term Loan Credit Agreements and (iii) provide for certain exclusions to prepayment premiums required under the Existing Term Loan Credit Agreement.

The foregoing descriptions are subject to, and qualified in their entirety by, the full texts of the Term Loan Amendments, which are incorporated herein by reference to Exhibits 10.1 - 10.2 to this Current Report on Form 8-K.





New ABL Credit Agreement

On September 23, 2020, Lead Borrower, as lead borrower, certain direct and indirect subsidiaries of Parent from time to time party thereto as borrowers (together with Lead Borrower, collectively, the "New ABL Borrowers"), Parent, as a guarantor, and certain direct and indirect subsidiaries of Parent from time to time party thereto as guarantors (together with Parent, the "New ABL Guarantors", and the New ABL Guarantors together with the New ABL Borrowers, the "New ABL Loan Parties") entered into an ABL Credit Agreement (the "New ABL Credit Agreement") with various lenders from time to time party thereto (the "New ABL Lenders"), Citizens Bank, N.A., as administrative agent and collateral agent (in such capacities, the "New ABL Agent") and the other persons from time to time party thereto. The New ABL Credit Agreement provides for a senior secured revolving loan facility (the "New ABL Revolver") with commitments available to the New ABL Borrowers of the lesser of (i) $125.0 million and (ii) a borrowing base based on the eligible credit card receivables, accounts, inventory and revenue due under certain rental agreements, less certain reserves, of Franchise Group Newco Intermediate AF, LLC, a Delaware limited liability company and an indirect subsidiary of the Company, and Franchise Group Intermediate B, LLC, a Delaware limited liability company and an indirect subsidiary of the Company, and each of their direct and indirect subsidiaries, in each case to the extent such persons are New ABL Loan Parties (collectively, the "Core New ABL Loan Parties"). The New ABL Credit Agreement also includes a $15.0 million swingline subfacility and a $15.0 million letter of credit subfacility.

The New ABL Borrowers' obligations under the New ABL Credit Agreement are guaranteed by the New ABL Guarantors, and are required to be guaranteed by each of Parent's direct and indirect subsidiaries (other than certain excluded subsidiaries) existing from time to time. The obligations of the New ABL Borrowers under the New ABL Credit Agreement are secured on a first priority basis by, subject to certain exceptions, credit card receivables, accounts receivable, deposit accounts, securities accounts, inventory and rental agreements of the New ABL Loan Parties (other than, to the extent constituting New ABL Loan Parties, the Liberty Parties), are secured on a second priority basis by substantially all other assets of the New ABL Loan Parties, and are required to be secured by each of Parent's direct and indirect subsidiaries (other than certain excluded subsidiaries) existing from time to time. The New ABL Borrowers borrowed approximately $32.7 million on September 23, 2020, the proceeds of which were used to prepay certain existing indebtedness under the Existing ABL Credit Agreement (as defined below), to pay fees and expenses in connection with the New ABL Credit Agreement and the Term Loan Amendment, and for general corporate purposes.

The New ABL Revolver will mature on the earlier of September 23, 2025 and the maturity date under the Term Loan Credit Agreement (i.e., February 14, 2025), unless the maturity is accelerated subject to the terms set forth in the New ABL Credit Agreement. Borrowings under the New ABL Revolver will, at Lead Borrower's option, bear interest at either (i) a rate per annum based on LIBOR for an interest period of one, two, three or six months (or, if all applicable New ABL Lenders agree, twelve months), plus an interest rate margin that ranges from 3.50% to 3.75%, depending on the total leverage ratio of the Core New ABL Loan Parties, with a 1.00% LIBOR floor (a "New ABL LIBOR Loan"), or (ii) an alternate base rate determined as provided in the New ABL Credit Agreement, plus an interest rate margin that ranges from 2.50% to 2.75%, depending on the total leverage ratio of the Core New ABL Loan Parties, with an effective 2.00% alternate base rate floor (a "New ABL ABR Loan"). Interest on New ABL LIBOR Loans is payable in arrears at the end of each applicable interest period (and, with respect to any six- or twelve-month interest period, at three month intervals after the first day of such interest period), and interest on New ABL ABR Loans is payable in arrears on the first day of each month.

If the sum of the outstanding principal amount of the outstanding loans (including swingline loans) under the New ABL Revolver and the outstanding amount of letter of credit obligations thereunder exceeds the borrowing base (as tested on a fiscal monthly basis, subject to weekly testing under certain . . .

Item 1.02. Termination of a Material Definitive Agreement.

As previously disclosed, on February 14, 2020, Lead Borrower, as lead borrower, certain direct and indirect subsidiaries of Parent from time to time party thereto as borrowers (together with Lead Borrower, collectively, the "Existing ABL Borrowers"), Parent, as a guarantor, and certain direct and indirect subsidiaries of Parent from time to time party thereto as guarantors entered into an ABL Credit Agreement (as amended, the "Existing ABL Credit Agreement") with the lenders from time to time party thereto (the "Existing ABL Lenders") and GACP Finance Co., LLC, as administrative agent and collateral agent (the "Existing ABL Agent"). The Existing ABL Credit Agreement provided for a $100.0 million senior secured asset-based term loan (the "Existing ABL Term Loan") to be made by the Existing ABL Lenders to certain of the Existing ABL Borrowers on February 14, 2020. The proceeds of the Existing ABL Term Loan were used, together with certain other funds, to consummate the acquisition (the "Merger") by Franchise Group Newco Intermediate AF, LLC, a Delaware limited liability company and an indirect subsidiary of the Company, of American Freight Group, Inc., a Delaware corporation (now known as American Freight Group, LLC, a Delaware limited liability company) ("American Freight"), on February 14, 2020, to prepay certain existing indebtedness of American Freight and its direct and indirect subsidiaries and certain other indirect subsidiaries of the Company, to pay fees and expenses in connection with the Merger, the Existing ABL Credit Agreement and the Original Term Loan Credit Agreement, and for general corporate purposes. On September 23, 2020, the Borrowers repaid in full all amounts that were outstanding under the Existing ABL Term Loan and terminated the Existing ABL Credit Agreement.

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

To the extent required, the information set forth in Item 1.01 to this Current Report on Form 8-K is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.





(c) Exhibits

The following exhibits are filed with this Current Report on Form 8-K:





  10.1     Amendment Number Three to Credit Agreement, dated as of September 23,
         2020, by and among Franchise Group New Holdco, LLC, Franchise Group
         Intermediate Holdco, LLC, each of their direct and indirect subsidiaries
         named therein, the lenders named therein, GACP Finance Co., LLC, as
         administrative agent, and Kayne Solutions Fund, L.P., as collateral
         agent.

  10.2     Amendment Number Four to Credit Agreement, dated as of September 25,
         2020, by and among Franchise Group New Holdco, LLC, Franchise Group
         Intermediate Holdco, LLC, each of their direct and indirect subsidiaries
         named therein, the lenders named therein, GACP Finance Co., LLC, as
         administrative agent, and Kayne Solutions Fund, L.P., as collateral
         agent.

  10.3     ABL Credit Agreement, dated as of September 23, 2020, by and among
         Franchise Group New Holdco, LLC, Franchise Group Intermediate Holdco, LLC,
         each of their direct and indirect subsidiaries named therein, the lenders
         named therein, Citizens Bank, N.A., as administrative agent and collateral
         agent, and the other persons named therein.*

  10.4     ABL Security Agreement, dated as of September 23, 2020, by and among by
         and among Franchise Group New Holdco, LLC, Franchise Group Intermediate
         Holdco, LLC, each of their direct and indirect subsidiaries named therein
         and Citizens Bank, N.A., as administrative agent and collateral agent.*

104      Cover Page Interactive Data File (embedded within the Inline XBRL
         document).

*Pursuant to Item 601(b)(10) of Regulation S-K, certain annexes to the agreement have not been filed herewith. The registrant agrees to furnish supplementally a copy of any omitted annex to the Securities and Exchange Commission upon request.

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