The document discusses the Elcano Franchise Fund 1 LP, which provides funding to franchisees of major Australian franchise systems. It has a Clearing Pool of 10 million units that funds are securitized from to Special Purpose Vehicle class units. The fund offers investors a quasi-fixed interest investment with a targeted return of 9.25% paid quarterly over 4 years while supporting Australian small businesses and franchisees. It compares favorably to typical venture capital funds by having lower fees, more stable returns, and partial capital returns during the investment period. The fund and manager aim to fill a gap in funding for proven franchisee businesses.

1. ELCANO FRANCHISE FUND
CLEARING POOL UNITS

2. Commercial-In-Confidence Copyright©Elcano Holdings Pty Ltd
Fund Purpose
• Elcano Franchise Fund 1 LP – providing
funding to franchisees of some of Australia’s
top franchise systems.
• Clearing Pool Class Units – the initial
placement pool behind the Franchise
Marketplace (www.franchisemarket.co),
from which funding is securitised to Special
Purpose Vehicle (SPV) class units.

3. Commercial-In-Confidence
Copyright©Elcano Holdings Pty
Ltd
Fund Purpose
10 Million Clearing
Pool Units
500,000 Franchisee
A class Units
Franchisee A
P & I @10%
Investor
P & I @ 9%
Buy debt (as units)
@ 3.25% discount

4. Commercial-In-Confidence
Copyright©Elcano Holdings Pty
Ltd
Investor Benefits
• Quasi Fixed Interest investment;
• Enhanced risk management strategy;
• Hybrid Capital Model; and
• Franchise Marketplace
• Return on Investment;
• Payments frequency;
• Lower fee structure;
• Supporting Australian early-stage businesses; and
• Elcano Team.

5. Commercial-In-Confidence
Copyright©Elcano Holdings Pty
Ltd
Elcano Franchise Fund 1
Low: where debt is
able to convert to
SPV units.
Moderate*
9.25% 7.5% - 9.0%*
Paid Quarterly Paid Monthly
4 years1
4 - 5.5 years*
High Low to High*
1. With the ability to extend to 5.5 years.* Each SPV class of units will have its own terms and
profile.
# Estimate.

6. Commercial-In-Confidence
Copyright©Elcano Holdings Pty
Ltd
Genuine VC/PE
Elcano Franchise Fund
Elcano Franchise Fund 1

7. Commercial-In-Confidence
Copyright©Elcano Holdings Pty
Ltd
Elcano Franchise Fund 1
Low: 1% Entry, 1%
investee payments,
1.25 - 2.5% RCH
Low: 1% Entry, 1%
investee payments
Moderate: permitted
and possible if a
secondary market is
established
Moderate: permitted and
possible if a secondary
market is established
Low: this is a once-off
investment pool of
only 10 million units
High: new SPV units
via Franchise
Marketplace
Moderate: via
residual capital
holding
Not applicable
Pooled investments Investor selection

8. Commercial-In-Confidence
Copyright©Elcano Holdings Pty
Ltd
Full model, notes and assumptions should be considered and are available from Elcano Capital
Elcano Franchise Fund 1 Year 1 Year 2 Year 3 Year 4 Year 5
INCOME
Investment 1,000,000-
Principal 165,830 181,386 198,401 217,013 218,392
Interest 83,270 67,714 50,699 32,088 9,950
Residual Capital Holding - - - - 30,000
Total Income 249,100 249,100 249,100 249,100 258,342 1,254,743
EXPENSE
Entry Fee 10,000 - - - -
Facilitation Fee 9,252 7,524 5,633 3,565 1,106
Residual Capital Hoding Fee - - - - 15,000
Total Fees 19,252 7,524 5,633 3,565 16,106 52,080
1,202,663
VC Industry Std
INCOME
Investment 1,000,000- - - - -
Interest - - - - -
Sale - - - - 1,275,389
Total Income - - - - 1,275,389 1,275,389
EXPENSE
Management Fee 20,000 20,000 20,000 20,000 20,000
Carried Interest - - - - 55,078
Total Fees 20,000 20,000 20,000 20,000 75,078 155,078
1,120,311
Elcano Franchise Fund 1

9. Commercial-In-Confidence
Copyright©Elcano Holdings Pty
Ltd
Board
Graham Hart AM
Chairman
Darren Lelliott
Managing Director
Stephen Rasmussen
Director
Nicole Ott
Marketing & Sales
Director
Elcano Vs. Other VCPE
David Gow
Director

10. Commercial-In-Confidence
Copyright©Elcano Holdings Pty
Ltd
Elcano Franchise Fund 1 LP
• Elcano Capital LP – Australian domiciled
fund manager;
• Operated by Elcano Pty Ltd - AFS licence
462624;
• EFF1 is conditionally registered VCLP with
AusIndustry;
• Compliant to receive mandatory $500K
VC/PE investment for SIV (industry projects
is worth $350m p.a.)
Elcano Franchise Fund 1

11. Commercial-In-Confidence
Copyright©Elcano Holdings Pty
Ltd
• 1,160 Franchise Systems;
• $144 billion sales turnover;
• 14% GDP;
• Employ 461,000 people;
• Only 1.5% (av) of franchisees in dispute with
franchisor;
• Sector average growth 7.79% p.a.;
• 16 industry categories;
• Franchisees outperform company stores 5 – 15%
revenue, 10% lower wage costs*.
Aust Franchise Sector
* Business Review Weekly, Franchisees trounce company-owned stores in major study,
28/3/14

12. Commercial-In-Confidence
Copyright©Elcano Holdings Pty
Ltd
• Funding
• 2nd largest industry challenge
• 5% (app. 60) bank funding arrangement
Aust Franchise Sector

13. Commercial-In-Confidence
Copyright©Elcano Holdings Pty
Ltd
Franchise Systems
Franchisee
Assessment 30%
•Track record
•Net asset position
•Training/education
Franchise System
Assessment 70%
•Only Tier 1 & 2
Franchisors
•Proven business
model, adequate
funding coverage
•Robust franchisee
assessment,
training, support.

14. Commercial-In-Confidence
Copyright©Elcano Holdings Pty
Ltd
Franchise Systems

15. Commercial-In-Confidence
Copyright©Elcano Holdings Pty
Ltd
• Information Memorandum with Application Form
• Minimum $500k – Maximum $3 million*
• 5% draw-down on application
• Residual draw-down ASAP
Applications
CLEARING POOL CLASS UNITS
* Flexible

16. For further information please contact:
Darren Lelliott (Managing Director)
Mobile: 0431 775 252 darren@elcano.com.au
www.elcano.com.au