36 Franchise Brands plc Annual Report and Accounts 2018 QCA PRINCIPLE 1 Strategy and business model Our vision and business model is to create a group of market-leading franchise businesses that benefit from sharing the same support services. Our strategy to deliver shareholder value is to acquire and develop franchise businesses which have market-leading positions that primarily provide services to individuals and businesses. Our focus is on established brands which can benefit from our shared support services as well as our management expertise and experience. The execution of this strategy is achieved through a combination of organic growth and growth through acquisition. The focus of future acquisitions will be on market-leading B2B and B2C franchise businesses of scale and where we believe our management and financial resources can enhance an already profitable business. Our shared support services underpin our business model. These include franchise recruitment, IT, finance and marketing. The shared support services allow the management of the individual brands to focus on expanding their networks and helping their franchisees to grow their businesses. Further information around our strategy and business model can be found in the Strategic Report. QCA PRINCIPLE 2 Meeting shareholder needs The Executive Chairman, the Chief Financial Officer, and the Corporate Development Director regularly meet with the institutional shareholders, and provide the Board with feedback from those meetings and other communications with shareholders. The Board is provided with research notes from sell-side analysts plus insight into shareholders’ views from the Company’s brokers and nominated adviser. The Group welcomes the personal investment in its equity that many employees and franchisees have made, as well as our retail investors. We regularly update the Investor Relations section of the Group’s website with the aim of providing useful information for all investors, but particularly our retail shareholders. We use our Annual Report to provide shareholders with details of the Group, operations, performance, strategy and policies. The Group also exhibits and presents at events attended by retail investors and subscribes, and provides content to, retail financial news websites. All Directors are invited to attend the AGM at which there is an opportunity for shareholders to ask questions formally, and the Directors are available following the meeting for informal discussions. Voting at the AGM is by poll, with the results being announced in the meeting. QCA PRINCIPLE 3 Manage our responsibilities to wider stakeholders The Board has a clear understanding of the Group’s key stakeholders (which includes our employees, franchisees, customers, suppliers, shareholders, regulators, and banks) and understands that the success of the Company depends on maintaining a positive relationship with each of these groups, particularly its franchisees. CORPORATE GOVERNANCE There are good relations with all of the stakeholder groups. The Group’s core business as a franchisor has minimal direct impact on society or communities in general terms, but the Board understands the importance of these issues. Management actively solicits feedback from employees and franchisees (both formally and informally) and maintains strong relationships with suppliers. In the current year this has included management visits to franchisees, one-to-one meetings by the senior executive with employees (“speed date the boss”), as well as more formal surveys carried out by independent firms. Customer reviews, ratings and feedback for all our consumer brands are received regularly and action taken where required. Each of our underlying franchise networks have potential environmental impacts which have been considered and minimised. For example, ChipsAway uses water-based paints and lacquers while Ovenclean uses environmentally-friendly cleaning chemicals. Metro Rod has highly developed health and safety systems and processes which take into account the potential health and safety risk from the nature of the equipment used and the public locations in which the services are carried out. QCA PRINCIPLE 4 Risk management The Risk Management section on pages 30 and 31 details the key risks to the business, how these are mitigated and the change in the identified risk over the last reporting period. The Board is embedding risk management principles to drive proactive management of, to better enable us to execute and deliver our strategy. As such, the Board implemented a new risk management framework during the year, which determines the extent of exposure to the identified risks that the Company is able to bear and willing to take. Any changes to the risk profile of the group will be discussed at Board meetings, and the risk management framework updated. The Board formally reviews the risk framework bi-annually. The Group does not currently have an internal audit function, but will consider the introduction of this as the Group grows. QCA PRINCIPLE 5 Maintain a well-functioning Board The Company is controlled by the Board of Directors. The Board comprises six Executive Directors and three Non-executive Directors, two of whom (Rob Bellhouse and David Poutney) are considered to be independent. Peter Molloy and Tim Harris are the Managing Directors of the two largest operating components of the Group and sit on the Board of Directors, and they are responsible for the operational leadership of their respective businesses. The Group holds Board meetings at least six times each financial year and at other times as and when required. During the current year the board met eight times. All directors (or their proxy) attended all meetings with the exception of Nigel Wray being unable to attend one meeting. Stephen Hemsley, the Executive Chairman, is responsible for the running of the Board.