SECURITIES AND EXCHANGE
COMMISSION
 Washington, D.C.
20549
 
 FORM 10-K
 
 [x]
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
 SECURITIES
EXCHANGE ACT OF 1934
 
 For the Fiscal Year Ended: September
30, 2009
 
 []
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
 SECURITIES
EXCHANGE ACT OF 1934
 
 Commission
File No. 0-27631
 
 Franchise
Holdings International, Inc.
 (Exact
Name of Small Business Issuer as specified in its charter)
 Nevada
              
              65-0782227(State
      or other jurisdiction
                of
      incorporation)
              
              (IRS
      Employer File Number)
 
 5910
      South University Boulevard, C-18, Unit 165
                Littleton,
      Colorado
              
              80121-2800(Address
      of principal executive offices)
              
              (zip
      code)
 (303)
220-5001
 (Registrant’s
telephone number, including area code)
 
 Securities
to be Registered Pursuant to Section 12(b) of the Act: None
 
 Securities
to be Registered Pursuant to Section 12(g) of the Act:
 Common
Stock, $.0.001 per share par value
 
 Indicate
by check mark if registrant is a well-known seasoned issuer, as defined in Rule
405 of the Securities Act. Yes []   No [X].
 
 Indicate
by check mark if registrant is not required to file reports pursuant to Section
13 or 15(d) of the Exchange Act.Yes [] No [X].
 
 Indicate
by check mark whether the registrant (1) has filed all Reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes: [ ]   No: [X]
 
 Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T(Section 232.405 of
this chapter) during the preceding 12 months(or such shorter period that the
registrant was required to submit and post such files. Yes []  No [
]
 
 Check if
there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is contained in this form and no disclosure will be contained, to
the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K.
[X]
 
 Indicate
by check mark whether the registrant is a large accelerated filer, a
non-accelerated filer, or a smaller reporting company. See definitions of “large
accelerated filer,” “accelerated filer,” and “small reporting company” in Rule
12b-2 of the Exchange Act.
  Large
      accelerated filer []
                Accelerated
      filer []Non-accelerated
      filer   [] (Do not check if a smaller reporting
      company)
                Smaller
      reporting company  [X]
 Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act):  Yes []   No
[X].
 
 State the
aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity was
last sold, or the average bid and asked price of such common equity, as of the
last business day of the registrant’s most recently completed second fiscal
quarter: approximately $71,000.
   
  FORM 10-K
  Franchise
Holdings International, Inc.
  INDEX
   PART
      IItem
      1. Business
              3Item
      1A. Risk Factors
              5Item
      2. Property
              9Item
      3. Legal Proceedings
              9Item
      4. Submission of Matters to a Vote of Security Holders
              9PART
      IIItem
      5. Market for Registrant’s Common Equity, Related Stockholder Matters and
      Issuer Purchases of Equity Securities
              9Item
      6. Selected Financial Data
              11Item
      7. Management's Discussion and Analysis of Financial Condition and Results
      of Operations
              11Item
      7A. Quantitative and Qualitative Disclosures About Market
    Risk
              12Item
      8. Financial Statements and Supplementary Data
              13Item
      9. Changes in and Disagreements with Accountants on Accounting and
      Financial Disclosures
              26Item
      9A(T). Controls and Procedures
              26Item
      9B. Other Information
              26PART
      IIIItem
      10. Directors, Executive Officers and Corporate Governance
              27Item
      11. Executive Compensation
              28Item
      12. Security Ownership of Certain Beneficial Owners and Management
      and Related Stockholder Matters
              28Item
      13. Certain Relationships and Related Transactions, and Director
      Independence
              29Item
      14. Principal Accountant Fees and Services
              29Item
      15. Exhibits Financial Statement Schedules
              30Signatures
              31
    -
2 -
  References
in this document to “Franchise Holdings,” "us," "we," or "Company" refer to
Franchise Holdings International, Inc.
 Forward-Looking
Statements
 
 The
following discussion contains forward-looking statements regarding us, our
business, prospects and results of operations that are subject to certain risks
and uncertainties posed by many factors and events that could cause our actual
business, prospects and results of operations to differ materially from those
that may be anticipated by such forward-looking statements. Factors that may
affect such forward-looking statements include, without limitation: our ability
to successfully develop new products and services for new markets; the impact of
competition on our revenues, changes in law or regulatory requirements that
adversely affect or preclude clients from using us for certain applications;
delays our introduction of new products or services; and our failure to keep
pace with our competitors.  When used in this discussion, words such
as “believes”, “anticipates”, “expects”, “intends” and similar expressions are
intended to identify forward-looking statements, but are not the exclusive means
of identifying forward-looking statements. Readers are cautioned not to place
undue reliance on these forward-looking statements, which speak only as of the
date of this report. We undertake no obligation to revise any forward-looking
statements in order to reflect events or circumstances that may subsequently
arise. Readers are urged to carefully review and consider the various
disclosures made by us in this report and other reports filed with the
Securities and Exchange Commission that attempt to advise interested parties of
the risks and factors that may affect our business.
 
 PART I
 Item 1. DESCRIPTION OF BUSINESS.
 
 Narrative
Description of the Business
 
 Our
History
 
 We were
originally incorporated as  FSGI corporation under the laws of the
State of Florida in 1997 as a holding company for the purpose of acquiring
Financial Standards Group, Inc. (FSG). That year FSGI Corporation acquired FSG,
a Florida company organized in October 1989, to assist credit unions in
performing financial services. FSG offered financial services to credit unions
as a wholly-owned subsidiary
 until its
sale in January 2000.
 
 On
December 21, 1998, FSGI Corporation, at the time a publicly traded company
trading on the OTCBB as FSGI, acquired all of the outstanding common stock of
The Martial Arts Network On-Line, Inc., a wholly owned subsidiary of The Martial
Arts Network, Inc. The Martial Arts Network On-Line, Inc., a company organized
under the laws of the State of Florida, was developed in 1996 by its parent
company The Martial Arts Network, Inc. as an electronic forum dedicated to
promoting education and awareness of martial arts through its web site. Upon
issuance of shares, and options to purchase shares of FSGI Corporation's common
stock to The Martial Arts Network, Inc., that company became the controlling
stockholder of FSGI Corporation.
 
 TMANglobal.com,
Inc. ("TMAN"), a corporation formed under the laws of the State of Florida, as
the result of a merger between FSGI Corporation and The Martial Arts Network
On-Line, Inc. on December 21, 1998.
 
 Franchise
Holdings was incorporated in the State of Nevada on April 2,
2003.  Franchise Holdings International, Inc. completed a merger with
TMAN Global.com Inc. on April 30, 2003.  This merger was in the nature
of a change in domicile of the Florida corporation to the State of Nevada, as
well as the acquisition of a new business.   Since the inception
of our current business operations, we have been in the business of
acquiring  franchise, license and distribution rights in new and
emerging growth companies.
 
  -
3 -
  Operations
 
 General
 
 We are
engaged in the business of marketing franchises. We currently possesses such
rights in a tanning and beauty salon, a financial/mortgage firm, a medical
clinic, and a consumer products/services company.
 At the
present time, we have no plans to raise any additional funds within the next
twelve months. Any working capital will be expected to be generated from
internal operations. However, we reserve the right to examine possible
additional sources of funds, including, but not limited to, equity or debt
offerings, borrowings, or joint ventures. Limited market surveys have ever been
conducted to determine demand for our products and services. Therefore, there
can be no assur­ance that any of its objectives will be
achieved.
 
 Nature
of Products and Services
 
 Our
principal activities are to acquire franchise, license and distribution rights
in new and emerging growth companies.
 
 We
currently have such rights in our portfolio to a tanning and beauty salon, a
financial/mortgage firm, a medical clinic, and a consumer products/services
company:
 
 Endless
Summer Tan- founded in 1999, is a tanning, hair, and beauty salon.
 
 Forever
Young Rejuvenation Clinics- plans to offer the most advanced, state-of-the-art,
and innovative medical treatments in the Medi-Spa industry.
 
 Monarch
Funding-a mortgage company.
 
 We have a
web site at www.fnhi.net.
 
 Markets
  We plan to continue to market our
through the internet and using traditional methods such as print and other
media. Currently, we have a marketing strategy, which uses the media, along with
our web site, to market our products nationwide. We plan to add new accounts
through direct solicitation, fax blast marketing, mass e-mail marketing, and
participation in franchise industry trade shows.
  Raw Materials
  The use of raw materials is not now a
material factor in our operations.
  Customers and
Competition
  The franchise business is a highly
competitive and fragmented industry, with no one single company or group of
companies having a large market share. Our operational activities focus
primarily on the franchise sales business, in which there is a great deal of
competition. We anticipate that competition will come from a number of sources,
many of which will have greater resources than we do. All franchisors in the
United States are potential competitors. There can be no guarantee that we will
be able to compete successfully over the short term or long
term.
  Employees
  Currently,
we employ one full-time person, our President. We may hire additional employees
in the future to facilitate anticipated growth projections.We reimburse our employee
for all necessary and customary business related expenses.
  -
4 -
   We have
no plans or agreements which provide health care, insurance or compensation on
the event of termination of employment or change in our control.
 
 Proprietary
Information
 
 We own no
proprietary information.
 
 Government
Regulation
 
 We
believe that governmental regulation will not be significant to us now or in the
future.
 
 Research
and Development
 
 We have
never spent any amount in research and development activities.
 
 Environmental
Compliance
 
 We
believe that we are not subject to any material costs for compliance with any
environmental laws.
 
 How
to Obtain our SEC Filings
  We file
annual, quarterly, and special reports, proxy statements, and other information
with the Securities Exchange Commission (SEC). Reports, proxy statements and
other information filed with the SEC can be inspected and copied at the public
reference facilities of the SEC at 100 F Street N.E., Washington, DC 20549. Such
material may also be accessed electronically by means of the SEC’s website at
www.sec.gov.
 
 Our
investor relations department can be contacted at our principal executive office
located at our principal office 5910 South University Boulevard, C-18, Unit 165,
Littleton, Colorado 80121-2800. Our phone number is (303) 220-5001. Our website
is www. fnhi.net
 
 ITEM
1A. RISK FACTORS
 
 You should carefully consider the
risks and uncertainties described below and the other information in this
document before deciding to invest in shares of our common stock. The occurrence of any of the
following risks could materially and adversely affect our business, financial
condition and operating result. In this case, the trading price of our common
stock could decline and you might lose all or part of your
investment.
  We
do not have a sustained history of profits in our operations and there is no
guarantee we will ever become profitable.
  We were formed in 1997. We began our
present operations in 2003. From the time we began operations until the present,
we operated at a loss. We had a net profit of $360,318 for the fiscal year ended
September 30, 2009, compared to a net loss of $43,841 for the fiscal year ended
September 30, 2008. The profit for the fiscal year ended September 30, 2009
represented an extraordinary event. We settled a number of debts during the
fiscal year and thereby showed a gain of $388,095 as a result. Otherwise, we
have had several years of losses and our losses may continue into the
future. Since we have no
history of profitability over a sustained period of time, we have limited
financial results upon which you may judge our potential. While we do not expect
to continue to incur losses in the near future, there can be no guarantee that
we will be able to sustain our profitable operations. We have experienced in the
past and may experience in the future under-capitalization, shortages, setbacks
and many of the problems, delays and expenses encountered by any business, many
of which are beyond our control. These include:
   -
5 -
   ●
              
              Lack of capital for
      operations,
  ●
              
              Substantial delays and expenses
      related to testing and development of new
  products,
  ●
              
              Development and marketing
      problems encountered in connection with our new and existing
      products,
  ●
              
              Competition from larger and more
      established companies, and
  ●
              
              Lack of market acceptance of our
      products.
 
 Because we have incurred losses from
current operations, our accountants have expressed doubts about our ability to
continue as a going concern.
 
 For the
fiscal year ended September 30, 2009, our accountants have expressed doubt about
our ability to continue as a going concern as a result of limited assets and
operating losses.  Based upon current plans, we expect to incur
operating losses in future periods because we will be incurring expenses and not
generating sufficient revenues. We expect our operating costs to range between
$20,000 and $30,000 for the fiscal year ending September 30, 2010. We cannot
guarantee that we will be successful in generating sufficient revenues or other
funds in the future to cover these operating costs. Failure to generate
sufficient revenues will cause us to go out of business.
 
 Because
of our lack of a profitable history and the fact that we are subject to intense
competition, any investment in us would be inherently risky.
  Because we are a company with no
history of   profitability and activity in a business which is
extremely competitive and subject to numerous risks, any investment in us would
be inherently risky.  Substantially all of our competitors have
greater financial resources and longer operating histories than we have and can
be expected to compete within the business in which we engage and intend to
engage. There can be no assurance that we will have the necessary resources to
become or remain competitive. We are subject to the risks, which are common to
all companies with a lack of profitable history. Therefore, investors should
consider an investment in us to be an extremely risky
venture.
  We remain at risk regarding our
continued ability to conduct successful operations. As a result, the investment
of our shareholders to be impaired or lost.
  The results of our operations will
depend, among other things, upon our ability to successfully develop and to
market our products. Further, it is possible that our operations will not
continue to generate income sufficient to meet operating expenses or will
generate income and capital appreciation, if any, at rates lower than those
anticipated or necessary to sustain ourselves. Our operations may be affected by
many factors, some known by us, some unknown, and some, which are beyond our
control. Any of these problems, or a combination thereof, could have a
materially adverse effect on our viability as an entity and might cause the
investment of our shareholders to be impaired or lost.
   -
6 -
   
   While we have limited products, the
opportunity for development of additional products may take longer than
anticipated and could be additionally delayed. Therefore, there can be no
assurance of timely completion and introduction of improved products on a
cost-effective basis, or that such products, if introduced, will achieve market
acceptance such that, in combination with existing products, they will sustain
us or allow us to achieve profitable operations.
  For the foreseeable future, our
success will depend upon our management.
  Our
success is dependent upon the decision making of our director and executive
officer. This individual, Mr.A. J. Boisdrenghien,
intends to commit as much time as necessary to our business. The loss of
Mr.Boisdrenghien
could have a materially adverse impact on our operations. We have no written
employment agreements with our Chief Executive Officer.We have not obtained key man
life insurance on the live of our officer and director.
  Our
stock price may be volatile, and you may not be able to resell your shares at or
above your initial sale price.
  There has been, and continues to be, a
limited public market for our common stock. Although our common stock trades in
the Pink Sheets, an active trading market for our shares has not, and may never
develop or be sustained. If you purchase shares of common stock, you may not be
able to resell those shares at or above the initial price you paid. The market
price of our common stock may fluctuate significantly in response to numerous
factors, some of which are beyond our control, including the
following:
  ●
              
              Actual or anticipated
      fluctuations in our operating
results;
  ●
              
              changes in financial estimates by
      securities analysts or our failure to perform in line with such
      estimates;
  ●
              
              changes in market valuations of
      other mortgage brokerage companies, particularly those that sell products
      similar to as ours;
  ●
              
              announcements by us or our
      competitors of significant innovations, acquisitions, strategic
      partnerships, joint ventures or capital
  commitments;
  ●
              
              introduction of technologies or
      product enhancements that reduce the need for our products;
      and
  ●
              
              departures of key
      personnel.
   -
7 -
   Our
stock has a limited public trading market.
  While our common stock currently
trades, our market is limited and sporadic. We cannot assure that such a market
will improve in the future. We cannot assure that an investor will be able to
liquidate his investment without considerable delay, if at all. If a more active
market does develop, the price may be highly volatile. The factors, which we
have discussed in this document, may have a significant impact on the market
price of the common stock. It is also possible that the relatively low price of
our common stock may keep many brokerage firms from engaging in transactions in
our common stock.
  The
over-the-counter market for stock such as ours has had extreme price and volume
fluctuations.
  The securities of companies such as
ours have historically experienced extreme price and volume fluctuations during
certain periods. These broad market fluctuations and other factors, such as new
product developments and trends in the our industry and in the investment
markets generally, as well as economic conditions and quarterly variations in
our operational results, may have a negative effect on the market price of our
common stock.
  The
market for our common stock is subject to rules relating to low-priced
stock.
  Our
common stock is currently listed for trading in the Pink Sheets under the
trading symbol FNHI and is subject to the “penny stock rules” adopted pursuant
to Section 15 (g) of the Securities Exchange Act of 1934, as amended.
In general, the penny stock rules apply to non-NASDAQ or non-national stock
exchange companies whose common stock trades at less than $5.00 per share or
which have tangible net worth of less than $5,000,000 ($2,000,000 if the company
has been operating for three or more years). Our tangible net worth was below
the minimum requirement as of September 30, 2009. Such rules require, among
other things, that brokers who trade “penny stock” to persons other than
“established customers” complete certain documentation, make suitability
inquiries of investors and provide investors with certain information concerning
trading in the security, including a risk disclosure document, quote
information, broker’s commission information and rights and remedies available
to investors in penny stocks. Many brokers have decided not to trade “penny
stock” because of the requirements of the penny stock rules and, as a result,
the number of broker-dealers willing to act as market makers in such securities
is limited. The “penny stock rules,” therefore, may have an adverse impact on
the market for our common stock.
  The lack of a broker or dealer to
create or maintain a market in our stock could adversely impact the price and
liquidity of our securities.
 
 We have
no agreement with any broker or dealer to act as a market maker for our
securities and there is no assurance that we will be successful in obtaining any
market makers. Thus, no broker or dealer will have an incentive to make a market
for our stock. The lack of a market maker for our securities could adversely
influence the market for and price of our securities, as well as your ability to
dispose of, or to obtain accurate information about, and/or quotations as to the
price of, our securities.
 
 Nevada  law and our
Articles of Incorporation protect our directors from certain types of lawsuits,
which could make it difficult for us to recover damages from them in the event
of a lawsuit.
 
 Nevada
law provides that our directors will not be liable to our company or to our
stockholders for monetary damages for all but certain types of conduct as
directors. Our Articles of Incorporation require us to indemnify our directors
and officers against all damages incurred in connection with our business to the
fullest extent provided or allowed by law. The exculpation provisions may have
the effect of preventing stockholders from recovering damages against our
directors caused by their negligence, poor judgment or other circumstances. The
indemnification provisions may require our company to use our assets to defend
our directors and officers against claims, including claims arising out of their
negligence, poor judgment, or other circumstances.
  -
8 -
  
 We
do not expect to pay dividends on our common stock.
 
 We have
not paid any cash dividends with respect to our common stock, and it is unlikely
that we will pay any dividends on our common stock in the foreseeable future.
Earnings, if any, that we may realize will be retained in the business for
further development and expansion.
   ITEM
2. DESCRIPTION OF PROPERTY.
 
 We
currently occupy office space on a rent-free basis from our President, Mr. A. J.
Boisdrenghien.  We have no equipment.
 
 ITEM 3. LEGAL PROCEEDINGS.
 
 A
complaint was filed against us regarding the payment of a $50,000 note payable
to unrelated parties which was due July 1, 2001. The complaint sought judgment
against us in the sum of $50,000 together with interest and costs. On May 23,
2002, a judgment was rendered against us requiring that we pay the $50,000 note
plus accrued interest of $9,049. The note continued to bear interest at 11%
until paid. As a subsequent event, in 2008 the noteholder agreed to settle the
judgment and any outstanding amount due for $6,250 in cash and 15,000 common
shares. The settlement was finalized in the first quarter of fiscal year
2009.
 
 On
January 22, 2002 we received a notice from the Commonwealth of Kentucky Revenue
Cabinet which was addressed to our predecessor, FSGI Corporation, requiring the
payment of $10,118 including balances on FSGI's corporation income and license
accounts. Our management believed that it received the notice in error as the
notice amounts assessed related to our formation in 1998. In 2002 we attempted
to resolve this matter with the Revenue Cabinet staff. After contacting the
Revenue Cabinet in 2008, we believe that the Revenue Cabinet considers the case
closed with no amounts due.
 
 Otherwise,
we are not a party to any material legal proceedings, nor is our property the
subject of any material legal proceeding.
 
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS.
 
 We held
no shareholders meeting in the fourth quarter of our fiscal year.
 
 
 PART
II
 
 ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
 
 Principal
Market or Markets
  Holders
 
 As of
September 30, 2009, there were 93 record holders of our common stock and there
were 2,840,864 shares of our common stock outstanding.
 
 Market
Information
 
 Our
shares of common stock are quoted on the Pink Sheets under the trading symbol
FNHI. The shares became trading in 1999 but there is no extensive history of
trading. The bid and asked price has been $0.11 and $3.00  during the
entire time the shares have been quoted. The quotations reflect interdealer
prices, without retail mark-up, mark-down or commission, and may not represent
actual transactions.
 
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9 -
  The
Securities Enforcement and Penny Stock Reform Act of 1990
 
 The
Securities and Exchange Commission has also adopted rules that regulate
broker-dealer practices in connection with transactions in penny stocks. Penny
stocks are generally equity securities with a price of less than $5.00 (other
than securities registered on certain national securities exchanges or quoted on
the NASDAQ system, provided that current price and volume information with
respect to transactions in such securities is provided by the exchange or
system).
 
 A
purchaser is purchasing penny stock which limits the ability to sell the stock.
The shares offered by this prospectus constitute penny stock under the
Securities and Exchange Act. The shares will remain penny stocks for the
foreseeable future. The classification of penny stock makes it more difficult
for a broker-dealer to sell the stock into a secondary market, which makes it
more difficult for a purchaser to liquidate his/her investment. Any
broker-dealer engaged by the purchaser for the purpose of selling his or her
shares in us will be subject to Rules 15g-1 through 15g-10 of the Securities and
Exchange Act. Rather than creating a need to comply with those rules, some
broker-dealers will refuse to attempt to sell penny stock.
 
 The penny
stock rules require a broker-dealer, prior to a transaction in a penny stock not
otherwise exempt from those rules, to deliver a standardized risk disclosure
document prepared by the Commission, which:
 ♦
                contains
      a description of the nature and level of risk in the market for penny
      stocks in both public offerings and secondary trading;♦
                contains
      a description of the broker's or dealer's duties to the customer and of
      the rights and remedies available to the customer with respect to a
      violation to such duties or other requirements of the Securities Act of
      1934, as amended;♦
                contains
      a brief, clear, narrative description of a dealer market, including "bid"
      and "ask" prices for penny stocks and the significance of the spread
      between the bid and ask price;♦
                contains
      a toll-free telephone number for inquiries on disciplinary
      actions;♦
                defines
      significant terms in the disclosure document or in the conduct of trading
      penny stocks; and♦
                contains
      such other information and is in such form (including language, type, size
      and format) as the Securities and Exchange Commission shall require by
      rule or regulation;
 
 The
broker-dealer also must provide, prior to effecting any transaction in a penny
stock, to the customer:
 
 ♦
                the
      bid and offer quotations for the penny stock;♦
                the
      compensation of the broker-dealer and its salesperson in the
      transaction;♦
                the
      number of shares to which such bid and ask prices apply, or other
      comparable information relating to the depth and liquidity of the market
      for such stock; and♦
                monthly
      account statements showing the market value of each penny stock held in
      the customer's account.
 In
addition, the penny stock rules require that prior to a transaction in a penny
stock not otherwise exempt from those rules; the broker-dealer must make a
special written determination that the penny stock is a suitable investment for
the purchaser and receive the purchaser's written acknowledgment of the receipt
of a risk disclosure statement, a written agreement to transactions involving
penny stocks, and a signed and dated copy of a written suitability statement.
These disclosure requirements will have the effect of reducing the trading
activity in the secondary market for our stock because it will be subject to
these penny stock rules. Therefore, stockholders may have difficulty selling
their securities.
  -
10 -
  
 
 Equity
Compensation Plan Information
 
 We
have no outstanding stock options or other equity compensation
plans.
 
 Reports
 
 We are
subject to certain reporting requirements and will furnish annual financial
reports to our stockholders, certified by our independent accountants, and will
furnish unaudited quarterly financial reports in our quarterly reports filed
electronically with the SEC. All reports and information filed by us can be
found at the SEC website, www.sec.gov.
 
 Stock
Transfer Agent
 
 The stock
transfer agent for our securities is Corporate Stock Transfer of Denver,
Colorado.  Their address is 3200 Cherry Creek Drive South, Suite 430,
Denver, Colorado 80209. Their phone number is (303) 282-4800.
 
 Dividend
Policy
 
 We have
not previously declared or paid any dividends on our common stock and do not
anticipate declaring any dividends in the foreseeable future. The payment of
dividends on our common stock is within the discretion of our board of
directors. We intend to retain any earnings for use in our operations and the
expansion of our business. Payment of dividends in the future will depend on our
future earnings, future capital needs and our operating and financial condition,
among other factors that our board of directors may deem relevant. We are not
under any contractual restriction as to our present or future ability to pay
dividends.
 
 ITEM 6. SELECTED FINANCIAL
DATA
 
 A smaller
reporting company is not required to provide the information in this
Item.
 
 
 ITEM
7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
 
 Certain
statements in this Management’s Discussion and Analysis of Financial Condition
and Results of Operations that are not historical facts are forward-looking
statements such as statements relating to future operating results, existing and
expected competition, financing and refinancing sources and availability and
plans for future development or expansion activities and capital expenditures.
Such forward-looking statements involve a number of risks and uncertainties that
may significantly affect our liquidity and results in the future and,
accordingly, actual results may differ materially from those expressed in any
forward-looking statements. Such risks and uncertainties include, but are not
limited to, those related to effects of competition, leverage and debt service
financing and refinancing efforts, general economic conditions, and changes in
applicable laws or regulations. The following discussion and analysis should be
read in conjunction with the consolidated financial statements and notes thereto
appearing elsewhere in this report.
 
 The
following discussion of our financial condition and results of operations should
be read in conjunction with our financial statements and the related notes
included in this report.
 
 Results
of Operations
 
 We had no
revenue for the fiscal years ended September 30, 2009 or
2008.
  -
11 -
  
 Operating
expenses during the year ended September 30, 2009 totaled $27,777, consisting of
legal and accounting fees.  Operating expenses during the year ended
September 30, 2008 totaled $13,315, consisting of legal and accounting
fees.
 
 We had a
net profit of $360,318 for the fiscal year ended September 30, 2009, compared to
a net loss of $43,841 for the fiscal year ended September 30, 2008. The profit
for the fiscal year ended September 30, 2009 represented an extraordinary event.
We settled a number of debts during the fiscal year and thereby showed a gain of
$388,095 as a result. Otherwise, we have had several years of losses and our
losses may continue into the future.
 
 We
believe that overhead cost in current operations should remain fairly constant
as sales improve. Each additional sale and correspondingly the gross profit of
such sale have minimal offsetting overhead cost
 
 Liquidity
and Capital Resources.
 
 At
September 30, 2009, we had an unrestricted cash balance of $-0-.
 
 Net cash
provided by operating activities was $25,650for the fiscal year ended
September 30, 2009, compared to cash used for or provided by operating
activities $-0- for the fiscal year ended September 30, 2008. The net cash
provided by operating activities for the fiscal year ended September 30, 2009
was related to our debt settlement activities.
 
 Cash
flows used or provided by investing activities was $-0- for the fiscal year
ended September 30, 2009, compared to $-0- for the fiscal year ended September
30, 2008.
 
 Cash
flows used for financing activities was $25,650 for the fiscal year ended
September 30, 2009, compared to  $-0- for the fiscal year ended
September 30, 2008. Cash flows used for financing activities for the fiscal year
ended September 30, 2009 represented payments made in settlement of various
debts.
 
 Off-Balance
Sheet Arrangements
 
 We have
no off-balance sheet arrangements with any party.
 
 Critical
Accounting Policies
 
 Our
discussion and analysis of results of operations and financial condition are
based upon our consolidated financial statements, which have been prepared in
accordance with accounting principles generally accepted in the United States of
America. The preparation of these consolidated financial statements requires us
to make estimates and judgments that affect the reported amounts of assets,
liabilities, revenues and expenses, and related disclosure of contingent assets
and liabilities. We evaluate our estimates on an ongoing basis, including those
related to provisions for uncollectible accounts receivable, inventories,
valuation of intangible assets and contingencies and litigation. We base our
estimates on historical experience and on various other assumptions that are
believed to be reasonable under the circumstances, the results of which form the
basis for making judgments about the carrying values of assets and liabilities
that are not readily apparent from other sources. Actual results may differ from
these estimates under different assumptions or conditions.
 
 The
accounting policies that we follow are set forth in Note 2 to our financial
statements as included in this prospectus. These accounting policies conform to
accounting principles generally accepted in the United States, and have been
consistently applied in the preparation of the financial
statements.
  
 ITEM
7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.
 
 A smaller
reporting company is not required to provide the information in this
Item.
  -
12 -
  
 ITEM
8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
   
  FRANCHISE
HOLDINGS INTERNATIONAL, INC.
 (A
Development Stage Company)
 
 FINANCIAL
STATEMENTS
 
 September
30, 2008 and 2009,
 And
For The Period From March 12, 2001
 (Inception
of Development Stage)
 Through
September 30, 2009
  
 
 
  -
13 -
  
 
 FRANCHISE
HOLDINGS INTERNATIONAL, INC.
 (A
Development Stage Company)
 Financial
Statements
 
 
 
 TABLE
OF CONTENTS
 
 
 PageREPORT
      OF INDEPENDENT REGISTEREDPUBLIC
      ACCOUNTING FIRM
                
                
                15FINANCIAL
      STATEMENTSBalance sheets
                
                
                16Statements of
      operations
                
                
                17Statements of stockholders’
      equity
                
                
                18Statements of cash
      flows
                
                
                19Notes to financial
      statements
                
                
                21
 
 
 
  -
14 -
  RONALD R.
CHADWICK, P.C.
 Certified
Public Accountant
 2851
South Parker Road, Suite 720
 Aurora,
Colorado  80014
 Telephone
(303) 306-1967
 Fax (303)
306-1944
 
 
 
 REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 
 Board of
Directors
 Franchise
Holdings International, Inc.
 Greenwood
Village, Colorado
 
 I have
audited the accompanying balance sheets of Franchise Holdings International,
Inc. (a development stage company)  as of September 30, 2008 and 2009,
and the related statements of operations, stockholders' equity and cash flows
for the years then ended, and for the period from  March 12, 2001
(inception of the development stage) through September 30, 2009. These financial
statements are the responsibility of the Company's management. My responsibility
is to express an opinion on these financial statements based on my
audit.
 
 I
conducted my audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that I plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation.  I believe that my audit provides a
reasonable basis for my opinion.
 
 In my
opinion, the financial statements referred to above present fairly, in all
material  respects, the financial position of Franchise Holdings
International, Inc. as of September 30, 2008 and 2009, and the related
statements of operations, stockholders' equity and cash flows for the years then
ended, and for the period from  March 12, 2001 (inception of the
development stage) through September 30, 2009 in conformity with accounting
principles generally accepted in the United States of America.
 
 The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. As discussed in Note 6 to the financial
statements the Company has suffered recurring losses from operations that raise
substantial doubt about its ability to continue as a going concern. Management's
plans in regard to these matters are also described in Note 6. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
 
 Aurora,
      Colorado
                /s/Ronald R.
      Chadwick, P.C.December
      8, 2009
                RONALD
      R. CHADWICK, P.C.
 
  -
15 -
  
 FRANCHISE
      HOLDINGS INTERNATIONAL, INC.(A
      Development Stage Company)BALANCE
      SHEETSSept.
      30, 2008
                
                
                Sept.
      30, 2009ASSETSTotal
      Assets
                
                $
                -
                
                
                $
                -LIABILITIES
      & STOCKHOLDERS' EQUITYCurrent
      liabilitiesAccounts
      payable
                
                $
                71,184
                
                
                $
                75Related
      party payables
                
                
                26,775Notes
      payable
                
                
                271,759Accrued
      interest payable
                
                
                238,580Stock
      subscription payable
                
                
                18,000Other
      payables
                
                
                5,084Total current
      liabilties
                
                
                631,382
                
                
                
                75Total
      Liabilities
                
                
                631,382
                
                
                
                75Stockholders'
      EquityCommon
      stock, $.0001 par value;20,000,000
      shares authorized;2,840,864
      shares issued and outstanding
                
                
                284
                
                
                
                284Stock
      subscription receivableAdditional
      paid in capital
                
                
                3,579,806
                
                
                
                3,850,795Accumulated
      deficit (including $301,107 deficit(2008)
      and $59,211 surplus (2009)accumulated
      during the development stage)
                
                
                (4,211,472
                )
                
                
                (3,851,154
                )Total
      Stockholders' Equity
                
                
                (631,382
                )
                
                
                (75
                )Total
      Liabilities and Stockholders' Equity
                
                $
                -
                
                
                $
                -
  The
accompanying notes are an integral part of the financial
statements.
 
  -
16 -
  
 FRANCHISE
      HOLDINGS INTERNATIONAL, INC.(A
      Development Stage Company)STATEMENTS
      OF OPERATIONSPeriod
      FromMar.
      12, 2001(Inceptionof
      Dev. Stage)Year
      Ended
                
                
                Year
      Ended
                
                
                ToSept.
      30, 2008
                
                
                Sept.
      30, 2009
                
                
                Sept.
      30, 2009Revenues
                
                $
                -
                
                
                $
                -
                
                
                $
                --
                
                
                
                -
                
                
                
                -Operating
      expenses:General
      and administrative
                
                
                13,315
                
                
                
                27,777
                
                
                
                93,65813,315
                
                
                
                27,777
                
                
                
                93,658Gain
      (loss) from operations
                
                
                (13,315
                )
                
                
                (27,777
                )
                
                
                (93,658
                )Other
      income (expense):Gain
      on debt relief
                
                
                
                
                
                
                388,095
                
                
                
                388,095Interest
      expense
                
                
                (30,526
                )
                
                
                
                
                
                
                (235,226
                )(30,526
                )
                
                
                388,095
                
                
                
                152,869Income
      (loss) beforeprovision
      for income taxes
                
                
                (43,841
                )
                
                
                360,318
                
                
                
                59,211Provision
      for income tax
                
                
                -
                
                
                
                -
                
                
                
                -Net
      income (loss)
                
                $
                (43,841
                )
                
                $
                360,318
                
                
                $
                59,211Net
      income (loss) per share(Basic
      and fully diluted)
                
                $
                (0.02
                )
                
                $
                0.13Weighted
      average number ofcommon
      shares outstanding
                
                
                2,840,864
                
                
                
                2,840,864
  The
accompanying notes are an integral part of the financial
statements.
 
  -
17 -
  
 
 FRANCHISE
      HOLDINGS INTERNATIONAL, INC.(A
      Development Stage Company)STATEMENTS
      OF STOCKHOLDERS' EQUITYCommon
      Stock
                
                
                
                
                
                Stock
                
                
                
                
                
                Stock-Amount
                
                
                Additional
                
                
                Subscription
                
                
                Accumulated
                
                
                holders'Shares
      (1)
                
                
                ($.0001
      Par)
                
                
                Paid
      in Capital
                
                
                Receivable
                
                
                Deficit
                
                
                EquityBalances
      at March 12, 2001
                
                
                90,861
                
                
                $
                9
                
                
                $
                3,562,331
                
                
                $
                (15,000
                )
                
                $
                (3,910,365
                )
                
                $
                (363,025
                )(Inception
      of development stage)Net
      income (loss) for the period
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (27,487
                )
                
                
                (27,487
                )Balances
      at September 30, 2001
                
                
                90,861
                
                
                $
                9
                
                
                $
                3,562,331
                
                
                $
                (15,000
                )
                
                $
                (3,937,852
                )
                
                $
                (390,512
                )Net
      income (loss) for the year
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (60,100
                )
                
                
                (60,100
                )Balances
      at September 30, 2002
                
                
                90,861
                
                
                $
                9
                
                
                $
                3,562,331
                
                
                $
                (15,000
                )
                
                $
                (3,997,952
                )
                
                $
                (450,612
                )Fractional
      shares - reverse stock split
                
                
                3
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                -Debt
      relief - repurchase obligation
                
                
                
                
                
                
                
                
                
                
                15,000
                
                
                
                15,000
                
                
                
                
                
                
                
                30,000Compensatory
      stock issuances
                
                
                2,750,000
                
                
                
                275
                
                
                
                2,475
                
                
                
                
                
                
                
                
                
                
                
                2,750Net
      income (loss) for the year
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (41,245
                )
                
                
                (41,245
                )Balances
      at September 30, 2003
                
                
                2,840,864
                
                
                $
                284
                
                
                $
                3,579,806
                
                
                $
                -
                
                
                $
                (4,039,197
                )
                
                $
                (459,107
                )Net
      income (loss) for the year
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (31,996
                )
                
                
                (31,996
                )Balances
      at September 30, 2004
                
                
                2,840,864
                
                
                $
                284
                
                
                $
                3,579,806
                
                
                $
                -
                
                
                $
                (4,071,193
                )
                
                $
                (491,103
                )Net
      income (loss) for the year
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (32,146
                )
                
                
                (32,146
                )Balances
      at September 30, 2005
                
                
                2,840,864
                
                
                $
                284
                
                
                $
                3,579,806
                
                
                $
                -
                
                
                $
                (4,103,339
                )
                
                $
                (523,249
                )Net
      income (loss) for the year
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (32,146
                )
                
                
                (32,146
                )Balances
      at September 30, 2006
                
                
                2,840,864
                
                
                $
                284
                
                
                $
                3,579,806
                
                
                $
                -
                
                
                $
                (4,135,485
                )
                
                $
                (555,395
                )Net
      income (loss) for the year
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (32,146
                )
                
                
                (32,146
                )Balances
      at September 30, 2007
                
                
                2,840,864
                
                
                $
                284
                
                
                $
                3,579,806
                
                
                $
                -
                
                
                $
                (4,167,631
                )
                
                $
                (587,541
                )Net
      income (loss) for the year
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (43,841
                )
                
                
                (43,841
                )Balances
      at September 30, 2008
                
                
                2,840,864
                
                
                $
                284
                
                
                $
                3,579,806
                
                
                $
                -
                
                
                $
                (4,211,472
                )
                
                $
                (631,382
                )Paid
      in capital - debt relief
                
                
                
                
                
                
                
                
                
                
                270,989
                
                
                
                
                
                
                
                
                
                
                
                270,989Net
      income (loss) for the year
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                360,318
                
                
                
                360,318Balances
      at September 30, 2009
                
                
                2,840,864
                
                
                $
                284
                
                
                $
                3,850,795
                
                
                $
                -
                
                
                $
                (3,851,154
                )
                
                $
                (75
                )_____________
 (1)
                As
      adjusted for a 1 for 100 reverse stock split effective May 9,
      2003.
 
 
 The
accompanying notes are an integral part of the financial
statements.
 
  -
18 -
  
 FRANCHISE
      HOLDINGS INTERNATIONAL, INC.(A
      Development Stage Company)STATEMENTS
      OF CASH FLOWSPeriod
      FromMar.
      12, 2001(Inceptionof
      Dev. Stage)Year
      Ended
                
                
                Year
      Ended
                
                
                ToSept.
      30, 2008
                
                
                Sept.
      30, 2009
                
                
                Sept.
      30, 2009Cash
      Flows From Operating Activities:Net
      income (loss)
                
                $
                (43,841
                )
                
                $
                360,318
                
                
                $
                59,211Adjustments
      to reconcile net loss tonet
      cash provided by (used for)operating
      activities:Amortization
      & depreciation
                
                
                
                
                
                
                
                
                
                
                475Loss
      on fixed asset disposal
                
                
                
                
                
                
                
                
                
                
                1,408Accounts
      payable
                
                
                150
                
                
                
                (351
                )
                
                
                18,951Related
      party payables
                
                
                13,165
                
                
                
                55,485
                
                
                
                87,431Accrued
      expenses
                
                
                30,526
                
                
                
                (1,707
                )
                
                
                233,519Gain
      on debt relief
                
                
                
                
                
                
                (388,095
                )
                
                
                (388,095
                )Compensatory
      stock issuances
                
                
                
                
                
                
                
                
                
                
                2,750Net cash provided by (used
      for)operating
      activities
                
                
                -
                
                
                
                25,650
                
                
                
                15,650Cash
      Flows From Investing Activities:Net
      cash provided by (used for)investing
      activities
                
                
                -
                
                
                
                -
                
                
                
                -(Continued
      On Following Page)
 
 
 The
accompanying notes are an integral part of the financial
statements.
 
  -
19 -
  
 FRANCHISE
      HOLDINGS INTERNATIONAL, INC.(A
      Development Stage Company)STATEMENTS
      OF CASH FLOWS(Continued
      From Previous Page)Period
      FromMar.
      12, 2001(Inceptionof
      Dev. Stage)Year
      Ended
                
                
                Year
      Ended
                
                
                ToSept.
      30, 2008
                
                
                Sept.
      30, 2009
                
                
                Sept.
      30, 2009Cash
      Flows From Financing Activities:Notes
      payable - borrowings
                
                
                
                
                
                
                
                
                10,000Notes
      payable - payments
                
                
                
                
                
                (25,650
                )
                
                
                (25,650
                )Net cash provided by (used
      for)financing
      activities
                
                
                -
                
                
                
                (25,650
                )
                
                
                (15,650
                )Net
      Increase (Decrease) In Cash
                
                
                -
                
                
                
                -
                
                
                
                -Cash
      At The Beginning Of The Period
                
                
                -
                
                
                
                -
                
                
                
                -Cash
      At The End Of The Period
                
                $
                -
                
                
                $
                -
                
                
                $
                -NoneSupplemental DisclosureCash
      paid for interest
                
                $
                -
                
                
                $
                -Cash
      paid for income taxes
                
                $
                -
                
                
                $
                -
  The
accompanying notes are an integral part of the financial
statements.
 
  -
20 -
  FRANCHISE
HOLDINGS INTERNATIONAL, INC.
 (A
Development Stage Company)
 NOTES
TO FINANCIAL STATEMENTS
 September
30, 2008 and 2009, & For The Period
 From
March 12, 2001 (Inception of Dev. Stage) Through September 30, 2009
 
 
 NOTE
1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
 
 Franchise
Holdings International, Inc. was incorporated in the State of Nevada on April 2,
2003. FSGI Corporation was incorporated in the State of Florida on May 15, 1997,
and in a reorganization on December 21, 1998 with another corporation named The
Martial Arts Network On-Line, Inc. (originally incorporated in Florida on May
23, 1996) changed its name to TMAN Global.Com, Inc. Franchise Holdings
International, Inc. and TMAN Global.Com, Inc. consummated a merger on April 30,
2003 whereby Franchise Holdings International, Inc. exchanged 1 common share for
all the 90,861 outstanding common shares of TMAN Global.Com, Inc. The purpose of
the transaction was a change of domicile. Pursuant to the merger terms,
Franchise Holdings International, Inc. was the surviving corporation and TMAN
Global.Com, Inc. ceased to exist. The accompanying financial statements include
the activities of Franchise Holdings International, Inc. and its predecessor
corporations, which are collectively referred to herein as the
“Company”.  Currently the Company is engaged in evaluating franchise
opportunities, and is considered to be in the development stage.
 
 Use of
Estimates
 
 The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates.
 
 Cash and cash
equivalents
 
 The
Company considers all highly liquid investments with an original maturity of
three months or less as cash equivalents.
 
 Accounts
receivable
 
 The
Company reviews accounts receivable periodically for collectability and
establishes an allowance for doubtful accounts and records bad debt expense when
deemed necessary. At September 30, 2008 and 2009, the Company had no balance in
its allowance for doubtful accounts.
 
 Property and
equipment
 
 Property
and equipment are recorded at cost and depreciated under straight line methods
over each item's estimated useful life.
  -
21 -
  FRANCHISE
HOLDINGS INTERNATIONAL, INC.
 (A
Development Stage Company)
 NOTES
TO FINANCIAL STATEMENTS
 September
30, 2008 and 2009, & For The Period
 From
March 12, 2001 (Inception of Dev. Stage) Through September 30, 2009
  
 NOTE
1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES  (Continued):
 
 Revenue
recognition
 
 Revenue
is recognized on an accrual basis as earned under contract terms.
 
 Advertising
costs
 
 Advertising
costs are expensed as incurred. The Company recorded no material advertising
costs in the fiscal years ended September 30, 2008 or 2009.
 
 Income
tax
 
 The
Company accounts for income taxes under Statement of Financial Accounting
Standards No. 109 (“SFAS 109”). Under SFAS 109 deferred taxes are provided on a
liability method whereby deferred tax assets are recognized for deductible
temporary differences and operating loss carryforwards and deferred tax
liabilities are recognized for taxable temporary differences. Temporary
differences are the differences between the reported amounts of assets and
liabilities and their tax bases. Deferred tax assets are reduced by a valuation
allowance when, in the opinion of management, it is more likely than not that
some portion or all of the deferred tax assets will not be realized. Deferred
tax assets and liabilities are adjusted for the effects of changes in tax laws
and rates on the date of enactment.
 
 Net income (loss) per
share
 
 The net
income (loss) per share is computed by dividing the net income (loss) by the
weighted average number of shares of common outstanding. Warrants, stock
options, and common stock issuable upon the conversion of the Company's
preferred stock (if any), are not included in the computation if the effect
would be anti-dilutive and would increase the earnings or decrease loss per
share.
 
 Financial
instruments
 
 The
carrying value of the Company’s financial instruments, as reported in the
accompanying balance sheets, approximates fair value.
 
 Fiscal
year
 
 The
Company employs a fiscal year ending September 30.
 
  -
22 -
  FRANCHISE
HOLDINGS INTERNATIONAL, INC.
 (A
Development Stage Company)
 NOTES
TO FINANCIAL STATEMENTS
 September
30, 2008 and 2009, & For The Period
 From
March 12, 2001 (Inception of Dev. Stage) Through September 30, 2009
  
 NOTE
1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued):
 
 Long-Lived
Assets
 
 In
accordance with Statement of Financial Accounting Standard 144 “Accounting for
the Impairment or Disposal of Long-Lived Assets”, the Company regularly reviews
the carrying value of intangible and other long-lived assets for the existence
of facts or circumstances, both internally and externally, that may suggest
impairment. If impairment testing indicates a lack of recoverability, an
impairment loss is recognized by the Company if the carrying amount of a
long-lived asset exceeds its fair value.
 
 Stock based
compensation
 
 The
Company accounts for employee and non-employee stock awards under SFAS 123(r),
whereby equity instruments issued to employees for services are recorded based
on the fair value of the instrument issued and those issued to non-employees are
recorded based on the fair value of the consideration received or the fair value
of the equity instrument, whichever is more reliably measurable.
 
 NOTE
2. RELATED PARTY TRANSACTIONS
 
 In 2008
and 2009 an officer provided the Company $13,165 and $55,485 in working capital
advances for ongoing operations. The same officer in 2009 contributed $82,260 in
debt relief to the Company (inclusive of the amounts noted in the previous
sentence). The officer also gave 26,000 Company common shares held by him to
other debtors in settlement of $18,000 in stock subscriptions payable and
$170,729 in notes payable, which the officer then contributed to
capital.
 
 
 NOTE
3. NOTES PAYABLE
 
 At
September 30, 2008 Company had $271,759 in notes payable outstanding to
non-related parties, currently due, bearing interest at rates from 10% - 12% per
annum, and convertible into common stock at $1 - $3 per share. Accrued interest
payable under the notes at September 30, 2008 was $238,580, and interest expense
in 2008 was $30,526. In 2003 an $18,000 note with an automatic conversion
feature was recorded as a stock subscription payable for 6,000 common shares
upon conversion. In 2009 the remaining noteholders agreed to cancel the
conversion feature and settle their notes upon payment of cumulative settlement
amounts of $25,650 in cash and 20,000 common shares. The note settlements were
finalized in the first quarter of fiscal year 2009. A Company officer provided
out of his personal shares the 6,000 shares to settle the stock subscription
payable and the 20,000 shares for the note settlement. Pursuant to the note
settlements, the noteholders, who were owed $271,759 in principal and $238,580
in interest (or $510,339 total),
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23 -
  
 FRANCHISE
HOLDINGS INTERNATIONAL, INC.
 (A
Development Stage Company)
 NOTES
TO FINANCIAL STATEMENTS
 September
30, 2008 and 2009, & For The Period
 From
March 12, 2001 (Inception of Dev. Stage) Through September 30, 2009
 
 
 NOTE
3. NOTES PAYABLE (Continued):
 
 were
given as noted above 20,000 of the Company’s common shares by an officer out of
his personal holdings in settlement of $170,729 out of the $510,339 owed
and  $25,650 in cash as full settlement, resulting in a gain on debt
relief for the Company of $313,960.
 
 NOTE
4. INCOME TAXES
 
 Deferred
income taxes arise from the temporary differences between financial statement
and income tax recognition of net operating losses. These loss carryovers are
limited under the Internal Revenue Code should a significant change in ownership
occur.
 
 At
September 30, 2008 and 2009 the Company had net operating loss carryforwards of
approximately $1,222,000 and $862,000 which begin to expire in 2012. The
deferred tax asset of $488,839 and $344,712 created by the net operating losses
has been offset by a 100% valuation allowance. The change in the valuation
allowance in 2008 and 2009 was $17,536 and $(144,127).
 
 
 NOTE
5. CONTINGENCIES
 
 On
January 22, 2002 the Company received a notice from the Commonwealth of Kentucky
Revenue Cabinet which was addressed to the Company's predecessor, FSGI
Corporation, requiring the payment of $10,118 including balances on FSGI's
corporation income and license accounts. The Company's management believed that
it received the notice in error as the notice amounts assessed related to the
Company's formation in 1998. In 2002 the Company was attempting to resolve this
matter with the Revenue Cabinet staff. After contacting the Revenue Cabinet in
2009, the Company believes that the Revenue Cabinet considers the case closed
with no amounts due.
 
  -
24 -
  
 FRANCHISE
HOLDINGS INTERNATIONAL, INC.
 (A
Development Stage Company)
 NOTES
TO FINANCIAL STATEMENTS
 September
30, 2008 and 2009, & For The Period
 From
March 12, 2001 (Inception of Dev. Stage) Through September 30, 2009
 
 
 NOTE
6. GOING CONCERN
 
 The
Company has suffered recurring losses from operations and has a working capital
deficit and stockholders' deficit, and in all likelihood will be required to
make significant future expenditures in connection with continuing marketing
efforts along with general administrative expenses. These conditions raise
substantial doubt about the Company’s ability to continue as a going
concern.
 
 The
Company may raise additional capital through the sale of its equity securities,
through an offering of debt securities, or through borrowings from financial
institutions. By doing so, the Company hopes through increased marketing efforts
to generate greater revenues. Management believes that actions presently being
taken to obtain additional funding provide the opportunity for the Company to
continue as a going concern.
  -
25 -
 
 ITEM
9. DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE.
 
 We did
not have any disagreements on accounting and financial disclosures with our
present accounting firm during the reporting period.
 
 
 ITEM
9A(T). CONTROLS AND PROCEDURES.
 
 Conclusion
Regarding the Effectiveness of Disclosure Controls and Procedures
 
 Under the
supervision and with the participation of our management, including our
principal executive officer and principal financial officer, we conducted an
evaluation of our disclosure controls and procedures, as such term is defined
under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as
amended (the Exchange Act).  Accordingly, we concluded that our
disclosure controls and procedures were effective as of September 30,
2009.
 
 Management’s
Annual Report on Internal Control Over Financial Reporting.
 
 Management
is responsible for establishing and maintaining adequate internal control over
financial reporting (ICFR).
 
 Our
internal control over financial reporting are designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation
of consolidated financial statements for external purposes in accordance with U.
S. generally accepted accounting principles.
 
 Our
management conducted an evaluation of the effectiveness of our internal control
over financial reporting based on the framework in Internal Control — Integrated
Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission.  Based on our evaluation, management has
concluded, as of September 30, 2009, we did maintain effective control over the
financial reporting process.
 
 Inherent
Limitations Over Internal Controls
 
 Internal
control over financial reporting cannot provide absolute assurance of achieving
financial reporting objectives because of its inherent limitations, including
the possibility of human error and circumvention by collusion or overriding of
controls. Accordingly, even an effective internal control system may not prevent
or detect material misstatements on a timely basis. Also, projections of any
evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions or that the
degree of compliance with the policies or procedures may
deteriorate.
 
 Attestation
Report of the Registered Public Accounting Firm.
 
 This
annual report does not include an attestation report of our independent
registered public accounting firm regarding internal control over financial
reporting. Management's report was not subject to attestation by our independent
registered public accounting firm pursuant to temporary rules of the SEC that
permit us to provide only management's report in this annual
report.
 
 Changes
in Internal Control Over Financial Reporting.
 
 We have
made no change in our internal control over financial reporting that has
materially affected, or is reasonably likely to materially affect, our internal
control over financial reporting.
 
 ITEM
9B. OTHER INFORMATION.
 
 Nothing
to report.
  -
26 -
  
 
 PART
III
 
 ITEM
10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
 
 Our
Director and Executive Officer, his age and position held with us as of
September  30, 2009 is as follows:
 
 NAME
              AGE
              POSITION HELDA.
      J. Boisdrenghien
              61
              President,
      Secretary and Director
 
 The
person named above is expected to hold said offices/positions until the next
annual meeting of our stockholders. He cannot be considered to be an independent
director.
 
 Mr.
Boisdrenghien is our sole Officer and Director. He has been our sole officer and
director since May, 2003.  He has been the President of Equity Capital
Holding, a consulting company, since 1999. He was formerly President of NABCO,
Inc, a bagel franchising company which was sold in 1999.  In 1999,
NABCO merged with EUniverse, which later changed its name to Intermix. Intermix
held several properties, including My Space, which was sold to News Corp in
2008. Mr. Boisdrenghien graduated from Pittsburgh State, in Pittsburgh, Kansas
in 1969, with a degree in finance.
 
 Committees
of the Board of Directors
 
 Currently,
we do not have any committees of the Board of Directors.
 
 Director
and Executive Compensation
 
 No
compensation has been paid and no stock options granted to any of our officers
or directors in the last three fiscal years.
 
 Employment
Agreements
 
 We have
no written employment agreements with any of our executive officer or key
employee.
 
 Equity
Incentive Plan
 
 We have
not adopted an equity incentive plan, and no stock options or similar
instruments have been granted to any of our officers or directors.
 
 Indemnification
and Limitation on Liability of Directors
 
 Our
Articles of Incorporation limit the liability of our directors to the fullest
extent permitted by Nevada law. Nothing contained in the provisions will be
construed to deprive any director of his right to all defenses ordinarily
available to the director nor will anything herein be construed to deprive any
director of any right he may have for contribution from any other director or
other person.
 
 At
present, there is no pending litigation or proceeding involving any of our
directors, officers, employees or agents where indemnification will be required
or permitted. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to our directors, officers and
controlling persons pursuant to the foregoing provisions, or otherwise, we have
been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act of 1933 and is,
therefore, unenforceable.
  -
27 -
  
 Item
11. EXECUTIVE COMPENSATION
 
 No
compensation has been paid and no stock options granted to our officer and
director in the last three fiscal years.
 
 ITEM
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS.
 
 The
following sets forth the number of shares of our $0.0001par value common stock
beneficially owned by (i) each person who, as of September 30, 2009, was known
by us to own beneficially more than five percent (5%) of its common stock; (ii)
our individual Director and (iii) our Officer and Director as a group. A total
of 2,840,864common
shares were issued and outstanding as of September 30, 2009.
   Name
      and AddressBeneficialOwner(1)
                
                No.
      ofSharesOwned
                
                
                Percentageof
      OwnershipA.
      J. Boisdrenghien
                
                
                995,800
                
                
                
                35.05%5910
      South University Boulevard, C-18, Unit 165Littleton,
      Colorado  80121-2800Robert
      Lazzeri (2)
                  2560
      W. Main Street
                  Littleton,
      Colorado 80120(2)
                
                
                600,000
                
                
                
                21.11%Earnest
      Mathis(3)2560
      W. Main StreetLittleton,
      Colorado 80120(2)
                
                
                600,000
                
                
                
                21.11%All
      Officers andDirectors
      as a Group
                
                
                995,800
                
                
                
                35.05%(one
      person)
 _____________
 
 (1)
              A
      total of  974,000 shares are owned in the name of Franchise
      Concepts, Inc. A total of  21,8000 shares owned by Equity
      Capital Holding Corporation. Both companies are affiliates of our
      President.
 (2)
              Includes
      300,000 shares owned in the name of Lazzeri Equity Partners 401(K) Plan
      and 300,000 shares owned in the name of Lazzeri Family
    Trust.
 (3)   Includes 300,000
shares owned in the name of Mathis Family Partners, Ltd. and 300,000 shares
owned in the name of Earnco MPPP.
 
  -
28 -
  ITEM
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
 
 We
currently occupy office space on a rent-free basis from our President, Mr. A. J.
Boisdrenghien.
 
 At
September 30, 2008 we had $271,759 in notes payable outstanding to non-related
parties, currently due, bearing interest at rates from 10% - 12% per annum, and
convertible into common stock at $1 - $3 per share. Accrued interest payable
under the notes at September 30, 2008 was $238,580, and interest expense in 2008
was $30,526. In 2003 an $18,000 note with an automatic conversion feature was
recorded as a stock subscription payable for 6,000 common shares upon
conversion. In 2009 the remaining noteholders agreed to cancel the conversion
feature and settle their notes upon payment of cumulative settlement amounts of
$25,650 in cash and 20,000 common shares. The note settlements were finalized in
the first quarter of fiscal year 2009. Our President provided out of his
personal shares the 6,000 shares to settle the stock subscription payable and
the 20,000 shares for the note settlement. Pursuant to the note settlements, the
noteholders, who were owed $271,759 in principal and $238,580 in interest (or
$510,339 total), were given as noted above 20,000 of our common shares by our
President out his personal shares in settlement of $170,729 out of the $510,339
owed and $25,650 in cash as full settlement, resulting in a gain on debt relief
from the promissory  notes of $313,960, with remainder of debt relief
on accounts payable at $74,135.
 
 In 2008
and 2009 our President provided us $13,165 and $55,485,respectively,in working capital
advances for ongoing operations.
 
 In June,
2008, Franchise Concepts, Inc., a company affiliated with our President, sold a
total of 300,000 shares to Lazzeri Equity Partners 401(K) Plan, 300,000 shares
to the Lazzeri Family Trust, 300,000 shares to Mathis Family Partners, Ltd. and
300,000 shares to Earnco MPPP. The total cash consideration was
$70,000.
  
 ITEM
14: PRINCIPAL ACCOUNTANT FEES AND SERVICES
 
 Our
independent auditor, Ronald R. Chadwick, P.C., Certified Public Accountants,
billed an aggregate of $7,500
for the fiscal year ended September 30, 2009 and  $2,710 for the
fiscal year ended September 30, 2008 for professional services rendered for the
audit of our annual financial statements and review of the financial statements
included in its quarterly reports.
 
 We do not
have an audit committee and as a result its entire board of directors performs
the duties of an audit committee. Our board of directors evaluates the scope and
cost of the engagement of an auditor before the auditor renders audit and
non-audit services.
  
 -
29 -
  ITEM
15. EXHIBITS FINANCIAL STATEMENT SCHEDULES.
 
 The
following financial information is filed as part of this report:
 
 (1)
FINANCIAL STATEMENTS
 
 (2)
SCHEDULES
 
 (3)
EXHIBITS. The following exhibits required by Item 601 to be filed herewith are
incorporated by reference to previously filed
documents:
 ExhibitNumber
              Description3.1*
              Articles
      of Incorporation3.2
      *
              Bylaws3.3 *
              Articles
      of Merger of TMAN Global.com, Inc. and FRANCHISE HOLDINGS INTERNATIONAL,
      INC.31.1
              Certification
      of CEO/CFO pursuant to Sec. 30232.1
              Certification
      of CEO/CFO pursuant to Sec. 906
 _____________
 
 *
Previously filed
 Reports
on Form 8-K.
 
 We filed
no reports on Form 8-K during the fourth quarter of the fiscal year ended
September 30, 2009.
  
  -
30 -
  SIGNATURES
 
 In
accordance with Section 12 of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized on December 29, 2009.
 
 
 FRANCHISE
      HOLDINGS INTERNATIONAL, INC.By:
              /s/
      A. J. BoisdrenghienA.
      J. BoisdrenghienChief
      Executive Officer and President
                (principal
      executive officer and principal financial and accounting
      officer)
 
 Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following person on behalf of the Registrant and in the
capacity and on the date indicated.
  Date:
      December 29, 2009
                By:
                /s/
      A. J. BoisdrenghienA.
      J. BoisdrenghienDirector
  -
31 -