🧁 Franchise Financing

Key Components and Actors:

• Franchise (Tomador):
  The franchisee, typically a business owner operating under a franchise model, applying for a credit line to support business operations or expansion.
• Investidor (Investor):
  Provides the funding by purchasing tokenized certificates of receivables (CRs). The CRs are split into different tranches, such as senior (fixed rate) and junior (variable rate) tranches.
• Securitizadora:
  Responsible for issuing and managing the CRs that are tokenized and sold to investors. The securitizadora also handles the segregation of funds in dedicated accounts.
• Transfero:
  Facilitates the conversion of Brazilian Reais (BRL) into digital Reais (BRZ), which are used for the purchase of CR tokens.
• Escrow Account:
  A segregated account used for disbursing funds to the franchise and managing repayments. It ensures that the funds are properly allocated and distributed.
• Mensalista:
  Refers to the franchisee's monthly payments or fees, which may be split across various accounts for operational, investment, or repayment purposes.

Process Workflow:

• Initial Setup and Conversion of BRL to BRZ:
  The franchisee (tomador) applies for a credit line, which is underwritten by the securitizadora. The funds are initially deposited as Brazilian Reais (BRL) into the system. These funds are converted into digital Reais (BRZ) by Transfero. This conversion facilitates the issuance and purchase of tokenized CRs within the system【39†source】.
• Issuance and Purchase of Tokenized CRs:
  Once the BRL is converted into BRZ, the franchisee issues commercial notes (Notas Comerciais), which are collateralized by the payments expected from the franchise's operations (e.g., monthly franchise fees or sales). The commercial notes are tokenized into CRs, which are then divided into senior and junior tranches. These tranches are purchased by investors, providing the necessary liquidity for the credit line. Investors use BRZ to buy these CR tokens, which represent their share of the receivables from the franchise's future payments【39†source】.
• Disbursement of Funds to Franchisee:
  After the CRs are sold, the funds are disbursed to the franchisee from a segregated escrow account. The smart contract ensures that the disbursement process is automated, transparent, and secure. The franchisee receives the BRZ, which can be converted back to BRL if necessary for operational expenses【39†source】.
• Repayment via Split Payments:
  The franchisee repays the credit line through monthly payments, often referred to as "mensalista." These payments are made directly from the franchisee's sales or monthly franchise fees. The payment is split into different portions: part goes to the investors (based on the CRs they hold), part covers operational costs, and the remainder may be directed toward fees or other expenses【39†source】.
• Collateralization of Payments:
  The monthly payments made by the franchisee serve as collateral for the commercial notes. These payments are split across various accounts, ensuring that investors are paid out first (senior tranche), followed by junior tranche holders. This structure ensures that the risk is managed effectively, with higher priority given to senior investors in case of any payment issues【39†source】.
• Escrow and Securitization Management:
  The escrow account plays a critical role in managing the flow of funds. It ensures that the franchisee's monthly payments are properly allocated according to the structure defined by the securitizadora and that investors receive their returns on time. The segregated accounts and securitization process reduce the risk of commingling funds, providing greater transparency and security for investors【39†source】.

Risk Mitigation:

• Securitization and Tokenization:
  By converting the commercial notes into tokenized CRs and splitting them into senior and junior tranches, the structure provides different levels of risk and reward for investors. Senior tranche holders are given priority in payouts, reducing their exposure to risk.
• Segregated Accounts:
  The use of escrow accounts and segregation of funds ensures that payments are properly managed, reducing the risk of misallocation and enhancing security.
• Collateralization:
  The monthly payments made by the franchisee are collateralized, ensuring that investors have a secured claim on the franchise's future revenue streams.

Summary:

This credit line structure for franchises leverages securitization and tokenization to provide liquidity to franchisees while offering investors a secure investment opportunity. The franchisee applies for a credit line, which is collateralized by future payments from the franchise's operations. The securitizadora tokenizes these payments into CRs, which are purchased by investors in senior and junior tranches. The franchisee repays the credit line through split monthly payments, which are managed by the escrow account and smart contracts, ensuring transparency and security throughout the operation.