In August, B. Riley Financial Inc. disclosed that it had invested $216.5 million in the $2.8 billion management-led acquisition of Franchise Group Inc. 

Many of B. Riley's brokers and financial advisors, acquired through the National Securities Corp. purchase last year, had played a role in raising funds for the acquisition. On November 8, B. Riley reported a net loss of $75.8 million in the third quarter, a significant decline from the $45.8 million profit recorded the previous year. This loss was attributed to the devaluation of its equities portfolio. Following this, S&P Global Ratings downgraded Franchise Group's credit rating to "B-" from "B" with a negative outlook, prompted by the company's reported decline in revenue and a net loss in the third quarter.

According to InvestmentNews, S&P is actively monitoring legal developments concerning Franchise Group's CEO, Brian Kahn. A recent Bloomberg report revealed that Kahn has been named as one of two co-conspirators by John Hughes, the co-founder of hedge fund Prophecy Asset Management. Hughes recently pleaded guilty to securities fraud. However, it remains unclear whether Kahn also is facing charges concerning those allegations.

Financial Advisor Transitions consults advisors nationwide to explore employment transition options and to preserve and protect their practice in any transition that they make.