3SOF

Just added .041.  Agree with Ramsburg in that 4.5 will be taken out very soon.
Taking an educated guess on some powerful news.   

Some 10-20 million share volume days may be coming. 
And this time, the price is not coming back down.
Locations are selling.  Opening more and Franchise cash is in.   
The 6% revenue trail will also help.

I agree, with the volume increasing we should be running up. I am long on this. Lets see.

The company is hinting towards Tuesday for a very nice press release.
And the filing with a PR talking about the glitch is confirmed for today with Ed.
Let's see what they can do for the price.   

Franchise Capital Corp. Reports an Increase in Asset Value
Sep 29, 2005 2:28:00 PM
Copyright Business Wire 2005
SCOTTSDALE, Ariz.--(BUSINESS WIRE)--Sept. 29, 2005--

Franchise Capital Corp. (OTCBB: FCCN) announced that the company has filed its Form 10-K for the year ending June 30, 2005 with the Securities and Exchange Commission. Highlights of the filing included the company's total assets as of June 30, 2005 which increased to $1,113,177. The assets exceeded total liabilities by $426,023. Also footnoted in the financials was the fact that many of the liabilities listed as of June 30, 2005 have since been relieved and will be reflected in the 10-Q due Nov. 14, 2005.

"Quarter by quarter we continue to improve the financial condition of Franchise Capital Corp.," stated Edward C. Heisler, Franchise Capital Corp. president and CEO. "I am very pleased with the continual improvement the company is making. We have made a 20% improvement in our asset value over the previous quarter and more than a 100% improvement over the previous year! Looking forward I am very excited about the future. As I stated in yesterday's press release, we have many things to share with shareholders in the coming days that I feel confident will continue to increase the value of the company."

About Franchise Capital Corp.

Franchise Capital Corp, is a business development company pursuant to Section 54 of the Investment Company Act of 1940. The company currently has five operating, synergistic investments holdings: Kokopelli's Mexican Grill Franchise Co., LLC; Cousin Vinnie's Franchise Co., LLC; Kirby Foo's Asian Grill Franchise Co., LLC; Comstock Jake's Franchise Co., LLC; and Fathom Business Systems Inc., all of which are engaged in business related to restaurant franchise development.

Safe Harbor Statement: The statements in this release that relate to future plans, expectations, events, performance, and the like are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and the Securities Exchange Act of 1934. Actual results or events could differ materially from those described in the forward-looking statements due to a variety of factors, including those set forth in the company's report on Form 10-KSB for fiscal year 2004 filed with the Securities and Exchange Commission.

Source: Franchise Capital Corp.

Ouch!!!  The market sure doesn't think this is a good thing!

Wish I had some free money to buy more at these prices. 

hope it is a shake as the news seems good, yet the reaction not.

I noticed alot of the initial onslaught after the news were small lots of 3, 4, and 5000 shares with a few big lots...who knows what that was about...but the PR promises good news coming...and that usually means PPS going up..holding here for now.

I'm not sure what people were expecting but this is good news.  It basically says that they are pretty much debt free and bringing in more and more money all the time.  Maybe people wanted more specific numbers.  They will come.

I like how Jeff calls FCCN a cash cow.  It's true.  Little capital investment for them and excellent income on the franchises.  It will become more evident with time.  People will get their hard facts if they are patient.

This was a classic sell on the news but its rebounded nicely.  The news in the coming days better include some new store openings/purchases or the price may decline. 

Either way, this is a quality long term hold IMO.

According to a poster on RB, who called the SEC filing office this afternoon, the SEC had not received Form 10K from FCCN up to the time of the call.  This is worrisome if true.  What do y'all think?

  Well, the PR was not what was expected and quickly became a dud...it does have promises, promises  and if they quickly come true it should be fine. The filing confusion is not good but seems to be par in pennyland from what I've seen so far. The PR's normally about match the worth of one share of the stock.  It did shoot up for a brief moment, and then a rush of mostly small lots went through to drive it down...when I see a bunch of small lots like that I think someone is trying to drive or hold the stock up or down...who knows which it was, but the end result was nil...the dud PR didn't really attract much volume and the price is just below where it was when the PR was released. Better be some meat and potatoes on the way soon or it will drop back into it's range. 

Yes, waiting for October 1st week to PR some new store openings/purchases.This is sure to go up.

The news today was not the news that is coming early next week.   
Hold tight if you can handle it.

Form 10-K for FRANCHISE CAPITAL CORP.


--------------------------------------------------------------------------------

30-Sep-2005

Annual Report



ITEM 7.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following information should be read in conjunction with the consolidated financial statements and notes thereto appearing elsewhere in this Form 10-K.

The information contained in this section should be read in conjunction with the Selected Financial Data and our Financial Statements and notes thereto appearing elsewhere in this 10K. The 10K, including the Management's Discussion and Analysis of Financial Condition and Results of Operations, contains forward-looking statements that involve substantial risks and uncertainties. These forward-looking statements are not historical facts, but rather are based on current expectations, estimates and projections about our industry, our beliefs, and our assumptions. Words such as anticipates, expects, intends, plans, believes, seeks, and estimates and variations of these words and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties, and other factors, some of which are beyond our control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements including without limitation (1) any future economic downturn could impair our customers' ability to repay our loans and increase our non-performing assets, (2) a contraction of available credit and/or an inability to access the equity markets could impair our lending and investment activities, (3) interest rate volatility could adversely affect our results, (4) the risks associated with the possible disruption in the Company's operations due to terrorism and (5) the risks, uncertainties and other factors we identify from time to time in our filings with the Securities and Exchange Commission, including our Form 10-Ks, Form 10-Qs and Form 8-Ks. Although we believe that the assumptions on which these forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate, and as a result, the forward-looking statements based on those assumptions also could be incorrect. In light of these and other uncertainties, the inclusion of a projection or forward-looking statement in this Quarterly Report should not be regarded as a representation by us that our plans and objectives will be achieved. You should not place undue reliance on these forward-looking statements, which apply only as of the date of this Annual Report.

Executive Overview

The Company was formed as a Nevada corporation on July 6, 2001 under the name Cortex Systems, Inc. We were originally a development stage company that intended to establish memory clinics in several different locations in North America. We were unable to successfully execute this business plan. As a result, in July of 2003, we changed the Company's name to BGR Corporation, replaced or reconstituted the management and board of directors and changed our business focus. The Company's focus was on acquiring new innovative fast-casual restaurant concepts, develop them into a profitable working design, and franchise them across the United States. On January 20, 2003, we entered into an agreement with American Restaurant Development Corporation, or ARDC, to grow restaurant concepts into a fully viable franchise system and to expand each restaurant concepts nationwide. On December 23, 2004, the Company converted to a Business Development Company under the Investment Company Act of 1940 and changed of the Company to Franchise Capital Corporation.

On November 4, 2003, we acquired Fathom Business Systems, or Fathom. Fathom is a company specializing in restaurant point of sales equipment. Fathom generates additional revenue by providing its customers with the supplies and service needed for the equipment.

On February 2, 2004, we executed an agreement with AZTECA Wrap Foods, LLC, or AZTECA. AZTECA is the owner and operator of KoKopelli's Mexican Grill.
KoKopelli's is a fast casual Mexican restaurant specializing in made-to-order Mexican-style food. Per the agreement, we own 50% of the joint venture entity, while the other 50% is owned by AZTECA. Additionally, we are

required to provide the funding to initiate the franchising of KoKopelli's through ARDC. AZTECA will provide exclusive rights to the "KoKopelli" name, trade marks, trade dress, operating system and recipes.

In April 2004, we entered into a shareholders agreement with Alexis Group, LLC, or ALEXIS. ALEXIS is the owner and operator of Pauli's Home of the SteakBurger.
Per the agreement, we own 50% of the joint venture entity, while the other 50% is owned by ALEXIS. Additionally, we are required to provide the funding to initiate the franchising of Pauli's through ARDC. ALEXIS will provide exclusive rights to the "Pauli's" name, trade marks, trade dress, operating system and recipes.

In April 2004, we executed a shareholders agreement with Brian Ruggiero, the owner and operator of Cousin Vinnie's Italian Diner. The Cousin Vinnie's concept was brought to FRANCHISE CAPITAL Corporation by American Restaurant Development Corporation ("ARDC"). Per the agreement, we own 50% of the joint venture entity, while the other 50% is owned by Ruggiero. Additionally, we are required to provide the funding to initiate the franchising of Cousin Vinnie's through ARDC. Ruggiero will provide exclusive rights to the "Cousin Vinnie's" name, trade marks, trade dress, operating system and recipes. On September 26, 2005 Ruggiero signed over his 50% interest in Cousin Vinnie's Franchise Company, LLC.

In April 2004, the purchase agreement for us to acquire Deville, Inc. was mutually cancelled. The agreement called for us to pay $700,000 in stock and cash for the exclusive rights to the Lucky Lou's fast casual restaurant concept.
Stock that had been issued per the agreement has been returned to the Company's treasury.

On April 15, 2004, our Board of Directors approved a stock dividend for all shareholders of record as of May 15, 2004. Under he terms of the dividend distribution, for every three shares held by a shareholder they will receive one additional share. No fractional shares are to be issued.

On December 17, 2004 the Company changed its name to Franchise Capital Corporation. The Board of Directors felt this name more closely defined its true operations, of investing in small, start up companies.

Effective December 23rd, 2004, the Company converted to a Business Development Company under the Investment Company Act of 1940. Upon completion of this conversion, they became an internally managed, diversified, closed-end investment company. Prior to the conversion they were a diversified holding company. Since the conversion to a Business Development Company occurred at the end of the quarter, the financials in this quarterly report reflect the Company operating as a diversified holding company for the 3 months ended December 31, 2004.

On May 16th the Company gained an additional 50% control of Kokopelli Franchise Company, LLC for a total of 100% by the way of a "Buy-Sell" offer within the operating agreement the Company had with AZTECA Wrap Foods, LLC. The purchase price for the 50% was $250,000.

In June of 2005 the Company created Fit-n-Healthy Franchise Company, LLC. Fit & Healthy Market Cafי is a concept that will serve great tasting, nutritious meal that fits into a healthy lifestyle. Each Fit-n-Healthy Market Cafי combines a quick-serve restaurant with a convenience-style retail store that carries the best health-oriented consumable products available for purchase. Fit-n-Healthy has since been sold to Creative Eateries Corporation for $50,000.

Plan of Operation

On December 23, 2004 the Company's Board of Directors elected to be regulated as a business investment company under the Investment Company Act of 1940. As a business development company ("BDC"), the Company is required to maintain at least 70% of its assets invested in "eligible portfolio companies", which are loosely defined as any domestic company which is not publicly traded or that has assets less than $4 million.

As of December 29, 2004, management has recognized that there is a deficiency in liquidity. Such deficiency has been noted in the notes to the financial statements and the audit opinion. To remedy this situation, the Board of Directors authorized management to file Form 1-E with the Commission notifying of its intent to sell up to $5 million of the Company's common stock under a Regulation E exemption.

As of June 30, 2005 Franchise Capital Corporation held six portfolio companies.
In August of 2005 the Company sold Fit-n-Healthy Franchise Company, LLC and presently has five portfolio investment, Fathom Business Systems, Inc., Comstock Jakes' Franchise Co., LLC, Cousin Vinnie's Franchise Co., LLC, Kirby Foo's Franchise Co., LLC and Kokopelli Franchise Co., LLC.

Currently, there are no commitments for material expenditures. It should be noted that the Company's auditors Epstein, Weber & Conover, P.L.C. have expressed in their audit opinion letter that there is substantial doubt about the Company's ability to continue as a going concern.

Liquidity and Capital Resources

The Company's financial statements present an impairment in terms of liquidity. As of June 30, 2005 the Company had $1,076,177 in current assets and the Company's total assets exceeded total liabilities by approximately $397,309.
The Company has accumulated $6,203,174 of net operating losses through June 30, 2005, which may used to reduce taxes in future years through 2022. The use of these losses to reduce future income taxes will depend on the generation of sufficient taxable income prior to the expiration of the net operating loss carry-forwards. The potential tax benefit of the net operating loss carry-forwards have been offset by a valuation allowance of the same amount. The Company has not yet established revenues to cover its operating costs.
Management believes that the Company will soon be able to generate revenues sufficient to cover its operating costs through the acquisition of operating subsidiaries. In the event the Company is unable to do so, and if suitable financing is unavailable, there is substantial doubt about the Company's ability to continue as a going concern.

Results of Operation

For the year ended June 30, 2005 the Company had a net loss of $721,517 compared to a net loss of $5,114,311 for year ended June 30, 2004.

Recent Developments -- Portfolio Companies

Kokopelli Franchise Company, LLC, a portfolio company specializing in the franchising of fast, casual sonoran style food, opened its first franchised restaurant in April. We anticipate receiving management fee income from the management of this location. Also, on August 29, 2005 Franchise Capital Corporation signed a purchase agreement with Azteca Wrap Foods, LLC. The property acquired was an additional fifty percent (50%) interest in Kokopelli Franchise Company, LLC

ITEM 7A.

this should clear the doubts of guessing if 10k was issue or not. Y'days bluff is gone. Will see a recent high's in coming days.