Easyhome said it has sold its U.S. franchise business to its U.S. Master Franchisor, Easygates.
"The sale of our U.S. franchise business to Easygates is consistent with Easyhome's strategic objectives of focusing on the Canadian marketplace by growing our easyfinancial consumer finance business and continuing to improve the profitability of our Canadian leasing business," said David Ingram, Easyhome's President & CEO. "Easygates has built a strong and experienced organization that is well positioned to grow and support the expanding U.S. franchise business. This transaction will allow Easygates to chart their own growth path in the large and dynamic U.S. marketplace."
According to a release, historically Easyhome and Easygates split the royalties associated with the U.S. franchise network. Under the terms of the sale agreement, Easygates has acquired from Easyhome its rights to receive its share of those royalties. Going forward, Easygates will continue to operate under the Easyhome banner but will be able to more easily adapt to the changing U.S. market while growing and supporting its franchise network.
Easygates agreed to pay $4.9 million for Easyhome's royalty rights and other considerations. Easygates paid $0.5 million at closing with the balance to be paid subsequently according to an agreed upon schedule, including an additional $3.8 million to be paid within 60 days of closing.
"We are excited and optimistic about the opportunities in front of us to grow our network of franchise stores," said Bud Gates, CEO of Easygates. "Our intimate knowledge of the U.S. lease-to-own market will enable us to aggressively grow our network and to deepen support for existing franchisees which will result in even stronger performance. Also, the consolidation of all franchise support by our team will provide greater focus and efficiency. We look forward to building on the success of the business that both Easyhome and Easygates have created."
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