Deleware, OH—Franchise Group, Inc. (FRG) shared the news that it has entered into a restructuring support agreement (RSA) with holders of approximately 80% of its first lien debt on a comprehensive solution to strengthen its capital structure and best position its leading brands, which include The Vitamin Shoppe, for continued sustainable growth. The Vitamin Shoppe will serve customers as usual at locations nationwide and online.

Based in Secaucus, NJ, The Vitamin Shoppe offers a comprehensive assortment of nutritional solutions, including vitamins, minerals, sports nutrition, specialty supplements, herbs, homeopathic remedies, and green living products. It carries products from approximately 700 national brands, and offers products from its proprietary brands within its owned and wholesale channels. In the U.S., The Vitamin Shoppe conducts business through approximately 700 company-operated and franchise retail stores under The Vitamin Shoppe and Super Supplements banners, and via its website, www.vitaminshoppe.com. Globally, The Vitamin Shoppe serves customers in select Asia, South America, and Central America markets through local omnichannel partners.

A spokesperson for The Vitamin Shoppe shared: "The Vitamin Shoppe’s business is healthy and strong, with sustainable cash flow and dynamic growth initiatives that remain in motion. Our nearly 700 stores and vitaminshoppe.com are fully open for business and our Health Enthusiast teams are as dedicated as ever to supporting customers on their personal journeys of lifelong wellness. The debt obligations of our parent company necessitated this strategic financial step, which is not reflective of The Vitamin Shoppe’s own financial stability, ongoing commitment to serving our communities, and promising roadmap for future growth.

Key details of FRG's RSA:

• The RSA contemplates the proposed equitization of the first lien debt into 100% of the equity in the reorganized enterprise. FRG said this would "substantially reduce the Company's debt, enhance liquidity, and strengthen the enterprise for the benefit of Pet Supplies Plus, The Vitamin Shoppe, and Buddy's Home Furnishings and their stakeholders."
• To implement the restructuring, FRG, its operating businesses, and its other affiliates commenced voluntary Chapter 11 proceedings in the U.S. Bankruptcy Court for the District of Delaware. Franchised locations of FRG's brands are not part of the proceedings.
• As part of the restructuring, the first lien lender group has committed $250 million in debtor-in-possession financing which, subject to Court approval and together with cash on hand, will provide FRG with ample liquidity to maintain operations across its businesses and fulfill go-forward commitments to employees, customers, vendors, franchise partners, and other stakeholders of FRG, The Vitamin Shoppe, and the other leading brands in the ordinary course.
• FRG is filing a series of customary motions with the Court to maintain business-as-usual operations on all fronts for  The Vitamin Shoppe and the other leading brands. These motions include requests to continue to pay wages and provide benefits to employees in the ordinary course and offer relied-upon customer programs. 
• Vendors of the go-forward operating businesses will be paid in the ordinary course for authorized goods received and services rendered after the filing.
• As part of this strategy, FRG has determined to wind down American Freight. Store closing sales at locations nationwide and online have commenced.

"Today's announcement to de-lever our balance sheet is a pivotal step forward in enabling our market-leading businesses Pet Supplies Plus, The Vitamin Shoppe, and Buddy's Home Furnishings to realize their full potential," said Andrew Laurence, FRG President and Chief Executive Officer, in a press release. "Each of these businesses has a demonstrated value proposition and provides great products and services to customers, which they will continue to do seamlessly during this process. Strengthening FRG's balance sheet will allow us to enhance our support for these businesses as they advance their growth trajectories."

Court filings and other information regarding the Chapter 11 proceedings can be found at https://cases.ra.kroll.com/FRG.

Vendors with questions can call (844) 285-4564 (toll-free) and +1 (646) 937-7751 (international) or email FRGInquiries@ra.kroll.com.