Franchise Group, Inc. (FRG) Class Action Lawsuit Investigation: B. Riley Investments

Gibbs Mura is investigating B. Riley’s recommendation that investors purchase shares of Franchise Group, Inc. (FRG) while allegedly failing to disclose key risks and conflicts of interest, resulting in significant investor losses. 

 

If you invested in Franchise Group through a B. Riley broker and suffered losses, you may have legal claims, entitling you to recovery.  

 

Our legal teams at Gibbs Mura and Silver Law Group have recovered hundreds of millions of dollars for investors. We have deep experience handling investment fraud matters. 

Franchise Group was a multi-brand retail holding company that owned and operated various businesses, including:  

 

• The Vitamin Shoppe 

• Buddy’s Home Furnishings 

• Pet Supplies Plus 

• Wag N’ Wash 

In 2023, Franchise Group was taken private in a transaction led by B. Riley Financial and Brian Kahn. B. Riley solicited investments in Franchise Group through funds titled “B. Riley Private Shares.”  

 

In November 2024, Franchise Group filed for Chapter 11 bankruptcy, resulting in substantial or total losses for investors. 

 

We are investigating claims on behalf of investors who purchased FRG investments through B. Riley brokers—to recover lost funds—based on B. Riley’s alleged failures to disclose material conflicts of interest and clear signs of investment risk. 

In December 2025, the former CEO of Franchise Group (FRG), Brian Kahn, pled guilty to participating in a years-long fraud—following the implosion of his Prophecy Asset Management Fund, which also led to the fall of Franchise Group. 

B. Riley clients were often sold FRG shares through B. Riley Private Shares 2023-2 QP, LLC—a special purpose vehicle (SPV) created for Franchise Group, Inc. investments. 

 

Despite alleged knowledge of Kahn’s fraudulent activities and financial troubles, B. Riley continued to recommend Franchise Group investments through its network of brokers. 

 

Our investigation focuses on whether B. Riley: 

 

• Failed to disclose material conflicts of interest 

• Failed to conduct adequate due diligence before recommending Franchise Group 

• Misrepresented or omitted financial risks and red flags 

• Made unsuitable investment recommendations 

• Violated FINRA suitability and supervision rules 

 

Investors were allegedly encouraged to invest in Franchise Group, while B. Riley and its related entities allegedly had significant undisclosed conflicts of interest – including a large stake in Franchise Group. 

Investors in FRG should speak with an investment fraud attorney if: 

 

• You invested in Franchise Group (FRG) through B. Riley or an affiliated broker 

• The investment was described as safe, stable, or income-producing 

• You were not informed of conflicts, financial distress, or management issues surrounding FRG 

• You suffered losses following the public fallout and subsequent bankruptcy of FRG. 

Investor class actions and FINRA arbitrations are subject to strict time limits. Delaying action may affect your rights. 

There is no financial downside to you if you pursue a legal claim—you only stand to recover additional funds.

 

We pursue cases on behalf of our clients on a “contingency fee basis”. This means that pursuing an IUL Lawsuit will cost you nothing unless we win, and even then, you pay nothing out-of-pocket (our attorneys’ fees and costs are deducted from your recovery).

Gibbs Mura, A Law Group

 

Gibbs Mura’s financial fraud and securities lawyers have more than two decades of experience prosecuting fraud. The firm has successfully litigated against some of the largest companies in the United States, and has recovered more than a billion dollars on clients’ behalf.

 

Gibbs Mura attorneys have fought some of the most complex cases brought under federal and state laws nationwide, and have been recognized with numerous awards and honors for their accomplishments, including Top 100 Super Lawyers in Northern California, Top Plaintiff Lawyers in California, The Best Lawyers in America, and rated AV Preeminent (among the highest class of attorneys for professional ethics and legal skills).

 

Silver Law Group

 

Silver Law Group is a team of securities lawyers, forensic accountants, and support staff who are dedicated to helping investors recover losses through securities arbitration and litigation.

 

The firm is led by Scott Silver, a former Wall Street defense attorney who has been representing customers in securities and investment fraud cases since 2002. Scott is admitted to practice in New York and Florida and the firm’s FINRA arbitration attorneys represents investors nationwide.