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, 2010





[] 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 [X ]   No [].





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 $83,858.





Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date. Common Stock, $0.001 par value – 2,840,864 shares, as of December 14, 2010





List hereunder the following documents if incorporated by reference and the Part of the Form 10-K (e.g., Part I, Part II, etc.) into which the document is incorporated: (1) Any annual report to security holders; (2) Any proxy or information statement; and (3) Any prospectus filed pursuant to Rule 424(b) or (c) under the Securities Act of 1933. The listed documents should be clearly described for identification purposes (e.g., annual report to security holders for fiscal year ended December 24, 1980): None














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. (Removed and Reserved)
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
14Item 9A(T). Controls and Procedures
14Item 9B. Other Information
14PART IIIItem 10. Directors, Executive Officers and Corporate Governance
15Item 11. Executive Compensation
16Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
16Item 13. Certain Relationships and Related Transactions, and Director Independence
17Item 14. Principal Accountant Fees and Services
17Item 15. Exhibits Financial Statement Schedules
17Signatures
18










- 2 -





References in this document to “Franchise Holdings,” "us," "we," “our”  or "Company" refer to Franchise Holdings International, Inc. unless the context indicates otherwise.





Cautionary Statements Under the Private Securities Litigation Reform Act of 1995





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 possess such rights in a tanning and beauty salon.





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 to a tanning and beauty salon and are pursuing other franchise and business opportunities.





We currently have franchise, license and distribution rights to Endless Summer Tan- founded in 1999, is a tanning, hair, and beauty salon.





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, 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.





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.








- 4 -





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 $13,555 for the fiscal year ended September 30, 2010. The net profit for the fiscal year ended September 30, 2009 represented an extraordinary event. We settled a number of debts during the fiscal year ending September 30, 2009 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, 2010, 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, 2011. 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.





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.








- 6 -





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.





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.








- 7 -





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, 2010. 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.





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.











- 8 -





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. 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.(Removed and Reserved).








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, 2010, 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 have ranged  between $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.





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).





- 9 -








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.





Equity Compensation Plan Information





We have no outstanding stock options or other equity compensation plans.








- 10 -





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





As a “smaller reporting company” as defined by item 10 of Regulation S-K,  we are 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, 2010 or 2009.




Operating expenses during the year ended September 30, 2010 totaled  $13,555, consisting of professional fees.  Operating expenses during the year ended September 30, 2009 totaled $27,777, consisting of professional fees.







- 11 -








We had a net loss of $13,555 for the fiscal year ended September 30, 2010, compared to a net profit  of  $360,318 for the fiscal year ended September 30, 2009. 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 including the fiscal year ended September 30, 2010  and our losses may continue into the future.





We believe that overhead cost in current operations should remain fairly constant.





Liquidity and Capital Resources.





At September 30, 2010, we had an unrestricted cash balance of $670.





Net cash used or provided by operating activities was $(12,074) for the fiscal years ended September 30, 2010, compared to cash provided by operating activities $25,650 for the fiscal year ended September 30, 2009. 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, 2010, compared to $-0- for the fiscal year ended September 30, 2009.





Cash flows used for financing activities was $12,744 for the fiscal year ended September 30, 2010, compared to  $-0- for the fiscal year ended September 30, 2009.





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, 2009 and 2010,


And For The Period From March 12, 2001


(Inception of Development Stage)


Through September 30, 2010




















- 13 -





FRANCHISE HOLDINGS INTERNATIONAL, INC.


(A Development Stage Company)


Financial Statements








TABLE OF CONTENTS








PageReports of Independent Registered Public Accounting Firms
F-2Balance Sheets at September 30, 2010 and 2009
F-4Statements of Operations for the years ended September 30, 2010and 2009, and for the period from March 12, 2001 (inception)through September 30, 2010
F-5Statement of Changes in Shareholders' Deficit for the period fromMarch 12, 2001 (inception) through September 30, 2010
F-6Statements of Cash Flows for the years ended September 30, 2010and 2009, and for the period from March 12, 2001 (inception)through September 30, 2010
F-7Notes to Financial Statements
F-8














F - 1




















Report of Independent Registered Public Accounting Firm








The Board of Directors and Shareholders


Franchise Holdings International, Inc.:








We have audited the accompanying balance sheet of Franchise Holdings International, Inc. (a development stage company) as of September 30, 2010, and the related statements of operations, changes in shareholders’ deficit, and cash flows for the year ended September 30, 2010.  These financial statements are the responsibility of the Company’s management.  Our responsibility is to express an opinion on these financial statements based on our audit.





We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.  Accordingly, we express no such opinion.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audit provides a reasonable basis for our opinion.





In our 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, 2010, and the results of its operations and its cash flows for the year ended September 30, 2010 in conformity with accounting principles generally accepted in the United States of America.





The accompanying financial statements have been prepared assuming the Company will continue as a going concern.  As discussed in Note 1 to the financial statements, the Company has a limited operating history and has suffered operating losses since inception, which raises substantial doubt about its ability to continue as a going concern.  Management’s plans in regard to these matters are also described in Note 1.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.











/s/Cordovano and Honeck LLP


Cordovano and Honeck LLP


Englewood, Colorado


December 8, 2010








F - 2




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, 2009, and the related statements of operations, stockholders' equity and cash flows for the year 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, 2009, and the related statements of operations, stockholders' equity and cash flows for the year 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.
 
 
 
 
 F - 3





Franchise Holdings International, Inc.


(A Development Stage Company)


Balance Sheets





September 30,2010


2009AssetsCash

$
670


$
—Total Assets

$
670


$
—Liabilities and Shareholders’ DeficitLiabilities:Accounts payable

$
1,556


$
75Total Liabilities


1,556



75Shareholders’ deficit (Notes 2 and 3):Common stock, $.0001 par value; 20,000,000 shares authorized,2,840,864 and 2,840,864 shares issued and outstanding,respectively


284



284Additional paid-in capital


3,863,539



3,850,795Accumulated deficit


(3,910,365
)


(3,910,365
)Equity accumulated during development stage


45,656



59,211Total Shareholders’ Deficit


(886
)


(75
)Total Liabilities and Shareholders’ Deficit

$
670


$
—








See accompanying notes to financial statements.








F - 4





Franchise Holdings International, Inc.


(A Development Stage Company)


Statements of Operations





March 12, 2001(Inception)For The Years ended

September 30,


Through

September 30,2010


2009


2010Revenue

$
—


$
—


$
—Operating expenses:General and administrative


13,555



27,777



107,213Operating loss


(13,555
)


(27,777
)


(107,213
)Other income (expense):Gain on debt relief


—



388,095



388,095Interest expense


—



—



(235,226
)Total other income (expense)


—



388,095



152,869Income (loss) before income tax


(13,555
)


360,318



45,656Provision for income tax (Note 4)


—



—



—Net income (loss)

$
(13,555
)

$
360,318


$
45,656Basic and diluted income (loss) per share

$
(0.00
)

$
0.13Weighted average number of commonshares outstanding


2,840,864



2,840,864





See accompanying notes to financial statements.








F - 5





Franchise Holdings International, Inc.


(A Development Stage Company)


Statement of Changes in Shareholders' Deficit





EquityAccumulatedAdditional


Stock





DuringCommon Stock


Paid-In


Subscription


Accumulated


DevelopmentShares


Par Value


Capital


Receivable


Deficit


Stage


TotalBalance, March 12, 2001 (inception ofdevelopment stage)


90,861


$
9


$
3,562,331


$
(15,000
)

$
(3,910,365
)

$
—


$
(363,025
)Net loss for period ended September 30, 2001


—



—



—



—



—



(27,487
)


(27,487
)Balance, September 30, 2001


90,861



9



3,562,331



(15,000
)


(3,910,365
)


(27,487
)


(390,512
)Net loss for year ended September 30, 2002


—



—



—



—



—



(60,100
)


(60,100
)Balance, September 30, 2002


90,861



9



3,562,331



(15,000
)


(3,910,365
)


(87,587
)


(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 loss for year ended September 30, 2003


—



—



—



—



—



(41,245
)


(41,245
)Balance, September 30, 2003


2,840,864



284



3,579,806



—



(3,910,365
)


(128,832
)


(459,107
)Net loss for year ended September 30, 2004


—



—



—



—



—



(31,996
)


(31,996
)Balance, September 30, 2004


2,840,864



284



3,579,806



—



(3,910,365
)


(160,828
)


(491,103
)Net loss for year ended September 30, 2005


—



—



—



—



—



(32,146
)


(32,146
)Balance, September 30, 2005


2,840,864



284



3,579,806



—



(3,910,365
)


(192,974
)


(523,249
)Net loss for year ended September 30, 2006


—



—



—



—



—



(32,146
)


(32,146
)Balance, September 30, 2006


2,840,864



284



3,579,806



—



(3,910,365
)


(225,120
)


(555,395
)Net loss for year ended September 30, 2007


—



—



—



—



—



(32,146
)


(32,146
)Balance, September 30, 2007


2,840,864



284



3,579,806



—



(3,910,365
)


(257,266
)


(587,541
)Net loss for year ended September 30, 2008


—



—



—



—



—



(43,841
)


(43,841
)Balance, September 30, 2008


2,840,864



284



3,579,806



—



(3,910,365
)


(301,107
)


(631,382
)Capital contributions by officer (Note 2)


—



—



270,989



—



—



—



270,989Net loss for year ended September 30, 2009


—



—



—



—



—



360,318



360,318Balance, September 30, 2009


2,840,864



284



3,850,795



—



(3,910,365
)


59,211



(75
)Capital contributions by officer (Note 2)


—



—



12,744



—



—



—



12,744Net loss for year ended September 30, 2010


—



—



—



—



—



(13,555
)


(13,555
)Balance, September 30, 2010


2,840,864


$
284


$
3,863,539


$
—


$
(3,910,365
)

$
45,656


$
(886
)








See accompanying notes to financial statements.





F - 6





Franchise Holdings International, Inc.


(A Development Stage Company)


Statements of Cash Flows






March 12, 2001(Inception)For The Years ended

September 30,


Through

September 30,2010


2009


2010Cash flows from operating activities:Net income (loss)

$
(13,555
)

$
360,318


$
45,656Adjustments to reconcile net loss to net cashused in operating activities:Amortization and depreciation


—



—



475Stock-based compensation


—



—



2,750Loss on fixed asset disposal


—



—



1,408Gain on debt relief


—



(388,095
)


(388,095
)Changes in operating assets and liabilities:Accounts payable


1,481



(351
)


20,432Accrued expenses


—



(1,707
)


233,519Related party payables


—



55,485



87,431Net cash provided by (used in)operating activities


(12,074
)


25,650



3,576Cash flows from financing activities:Capital contributed by related parties


12,744



—



12,744Notes payable - borrowings


—



—



10,000Notes payable - payments


—



—



(25,650
)Net cash provided by (used in)financing activities


12,744



—



(2,906
)Net change in cash


670



25,650



670Cash, beginning of period


—



—



—Cash, end of period

$
670


$
25,650


$
670Supplemental disclosure of cash flow information:Cash paid during the period for:Income taxes

$
—


$
—


$
—Interest

$
—


$
—


$
—




See accompanying notes to financial statements.





F - 7





Franchise Holdings International, Inc.


(A Development Stage Company)


Notes to Financial Statements






(1) Nature of Organization and Summary of Significant Accounting Policies




Nature of Organization




Franchise Holdings International, Inc. (referenced as “we”, “us”, “our” in the accompanying notes) 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.  Currently we are engaged in evaluating franchise opportunities, and are considered to be in the development stage.




Going Concern




The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.  As shown in the accompanying financial statements, the Company has a limited operating history and has suffered losses since inception.  These factors, among others, may indicate that the Company will be unable to continue as a going concern.




In recent years, we have relied upon our president to contribute capital to maintain our limited operations (see Notes 2 and 3). There is no assurance that these loans will continue, or that we will be successful in raising the capital required to continue our operations.




The financial statements do not include any adjustments relating to the recoverability and classification of assets and/or liabilities that might be necessary should we be unable to continue as a going concern.  Our continuation as a going concern is dependent upon our ability to meet our obligations on a timely basis, and, ultimately to attaining profitability.




Development Stage Company




We are in the development stage in accordance with the Accounting and Reporting by Development Stage Enterprises Topic of the Financial Accounting Standards Board’s Accounting Standards FASB ASC (FASB ASC).




Use of Estimates




The preparation of financial statements in accordance with generally accepted accounting principles permits management to make estimates and assumptions that affect the reported amounts of assets andliabilities and the disclosure of contingent assets and liabilities at the date of financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.







F - 8





Franchise Holdings International, Inc.


(A Development Stage Company)


Notes to Financial Statements








Cash and Cash Equivalents




We consider all highly liquid securities with original maturities of three months or less when acquired, to be cash equivalents.  We had no cash equivalents at September 30, 2010 and 2009.




Fair Value of Financial Instruments




The carrying amounts of cash and current liabilities approximate fair value because of the short-term maturity of these items. These fair value estimates are subjective in nature and involve uncertainties and matters of significant judgment, and, therefore, cannot be determined with precision.  Changes in assumptions could significantly affect these estimates.  We do not hold or issue financial instruments for trading purposes, nor do we utilize derivative instruments.




The FASB ASC clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. It also requires disclosure about how fair value is determined for assets and liabilities and establishes a hierarchy for which these assets and liabilities must be grouped, based on significant levels of inputs as follows:




Level 1:
Quoted prices in active markets for identical assets or liabilities.Level 2:
Quoted prices in active markets for similar assets and liabilities and inputs that are observable for the asset or liability.Level 3:
Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.




The determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement.




Earnings (Loss) per Common Share




We report earnings (loss) per share using a dual presentation of basic and diluted earnings (loss) per share.  Basic earnings (loss) per share excludes the impact of common stock equivalents.  Diluted earnings (loss) per share utilizes the average market price per share when applying the treasury stock method in determining common stock equivalents.  At September 30, 2010 and 2009, there were no variances between the basic and diluted loss per share as there were no potentially dilutive securities outstanding.




Income Taxes





We account for income taxes as required by the Income Tax Topic of the FASB ASC, which requires recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statements or tax returns.  Under this method, deferred tax liabilities and assets are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.





F - 9





Franchise Holdings International, Inc.


(A Development Stage Company)


Notes to Financial Statements








We have analyzed filing positions in all of the federal and state jurisdictions where we are required to file income tax returns, as well as all open tax years in these jurisdictions.  The Company has identified its federal tax return and its state tax return in Colorado as “major” tax jurisdictions, as defined.  We are not currently under examination by the Internal Revenue Service or any other jurisdiction.  The Company believes that its income tax filing positions and deductions will be sustained on audit and does not anticipate any adjustments that will result in a material adverse effect on the Company’s financial condition, results of operations, or cash flow.  Therefore, no reserves for uncertain income tax positions have been recorded.




Fiscal Year-end




The Company operates on a September 30 year-end.




Stock-Based Compensation




Stock-based compensation is accounted for under ASC 718 (formerly - SFAS No. 123 (revised 2004)), "Share-Based Payment", using the modified prospective method. ASC 718 requires the recognition of the cost of employee services received in exchange for an award of equity instruments in the financial statements and is measured based on the grant date fair value of the award. ASC 718 also requires the stock option compensation expense to be recognized over the period during which an employee is required to provide service in exchange for the award (generally the vesting period).




Recently Issued Accounting Pronouncements




In June 2009, FASB approved the FASB Accounting Standards FASB Accounting Standards Codification (“FASB ASC”) as the single source of authoritative non-governmental GAAP. All existing accounting standard documents, such as FASB, American Institute of Certified Public Accountants, Emerging Issues Task Force and other related literature, excluding guidance from the Securities and Exchange Commission (“SEC”), have been superseded by the FASB ASC. All other non-grandfathered, non-SEC accounting literature not included in the FASB ASC has become non-authoritative. The FASB ASC did not change GAAP, but instead introduced a new structure that combines all authoritative standards into a comprehensive, topically organized online database. The FASB ASC was effective for us beginning September 15, 2009, and impacts our financial statements, as all future references to authoritative accounting literature are now referenced in accordance with the FASB ASC. There have been no changes to the content of our financial statements or disclosures as a result of implementing the FASB ASC during the years ended September 30, 2010 and 2009.





In October 2009, the FASB issued ASC 605 (formerly - ASU 2009-13), “Revenue Recognition (Topic 605) — Multiple-Deliverable Revenue Arrangements.” This ASU eliminates the requirement that all undelivered elements must have objective and reliable evidence of fair value before a company can recognize the portion of the consideration that is attributable to items that already have been delivered. This may allow some companies to recognize revenue on transactions that involve multiple deliverables earlier than under the current requirements. Additionally, under the new guidance, the relative selling price method is required to be used in allocating consideration between deliverables and the residual value method will no longer be permitted. This ASU is effective prospectively for revenue arrangements entered into or materially modified beginning in fiscal 2011. A company may elect, but will not be required, to adopt the amendments in this ASU retrospectively for all prior periods. We are currently evaluating the requirements of this ASU and do not expect its provisions to have a material effect on our financial statements.





F - 10








Franchise Holdings International, Inc.


(A Development Stage Company)


Notes to Financial Statements






In April 2010, the FASB issued ASC 605 (formerly -ASU 2009-13), “Revenue Recognition – Milestone Method (Topic 605):  Milestone Method of Revenue Recognition.”  This ASU is effective on a prospective basis for milestones achieved in fiscal years, and interim periods within those years, beginning on or after June 15, 2010.  Early adoption is permitted.  If a vendor elects early adoption and the period of adoption is not the beginning of the entity’s fiscal year, the entity should apply the amendments retrospectively from the beginning of the year of adoption.  We do not expect the provisions of this pronouncement to have a material effect on our financial statements.






(2) Related Party Transactions




During the year ended September 30, 2010, an officer contributed $12,744 to us for working capital to support our development stage operations. These contributions are included in the accompanying financial statements as Additional paid-in capital.




During the year ended September 30, 2009, an officer contributed $82,260 to us for working capital to support our development stage operations. In addition, the officer gave 26,000 shares of his own stock in Franchise Holdings International, Inc. 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. Total contributions of $270,989 are included in the accompanying financial statements as Additional paid-in capital.






(3) Notes Payable




At September 30, 2008, we had $271,759 in notes payable outstanding to non-related parties, currently due, bearing interest at rates from 10 to 12 percent per annum, and convertible into common stock at $1 to $3 per share. Accrued interest payable under the notes at September 30, 2008 was $238,580. During 2009, the noteholders agreed to cancel the conversion feature and settle their notes upon payment of cumulative settlement amounts totaling $25,650 in cash and 20,000 common shares. The note settlements were finalized in the first quarter of fiscal year September 30, 2009. An officer provided (out of his personal shares in Franchise Holdings International, Inc.) the 20,000 shares for the note settlement. Pursuant to the note settlement, the noteholders, who were owed a total of $510,339, were given 20,000 of the Company’s common shares (by an officer out of his personal holdings) in settlement of $170,729 and  $25,650 in cash as full settlement, resulting in a gain on debt relief for the Company totaling $313,960.




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. During the year ended September 30, 2009, an officer provided (out of his personal shares in Franchise Holdings International, Inc.) the 6,000 shares to settle the stock subscription payable.





F - 11





Franchise Holdings International, Inc.


(A Development Stage Company)


Notes to Financial Statements






(4) Income Taxes




At September 30, 2010, deferred tax assets consisted of a net tax asset of $347,279, due to operating loss carryforwards of approximately $875,000, which was fully allowed for in the valuation allowance of $347,279.  The valuation allowance offsets the net deferred tax asset for which there is no assurance of recovery.  The changes in the valuation allowance for the year ended September 30, 2010 totaled $2,267.  The net operating loss carryforward expires through the year 2030.




At September 30, 2009, deferred tax assets consisted of a net tax asset of $344,712, due to operating loss carryforwards of approximately $862,000, which was fully allowed for in the valuation allowance of $344,712.  The valuation allowance offsets the net deferred tax asset for which there is no assurance of recovery.  The changes in the valuation allowance for the year ended September 30, 2009 totaled $(144,127).




The valuation allowance will be evaluated at the end of each year, considering positive and negative evidence about whether the deferred tax asset will be realized.  At that time, the allowance will either be increased or reduced; reduction could result in the complete elimination of the allowance if positive evidence indicates that the value of the deferred tax assets is no longer impaired and the allowance is no longer required.




Should we undergo an ownership change as defined in Section 382 of the Internal Revenue Code, our net tax operating loss carryforwards generated prior to the ownership change will be subject to an annual limitation, which could reduce or defer the utilization of these losses.






(5) Contingency




On January 22, 2002 the Company received a notice from the Commonwealth of Kentucky Revenue Cabinet that 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.






(6) Subsequent Events




We have evaluated the effects of all subsequent events from October 1, 2010 through December 8, 2010, the date the accompanying financial statements were available for use.





F - 12





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, 2010.





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, 2010, 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.





- 14 -








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, 2010 is as follows:





NAME
AGE
POSITION HELDA. J. Boisdrenghien
62
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.





- 15 -





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, 2010, 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, 2010.








Name and Address

Beneficial

Owner(1)

No. of

Shares

Owned


Percentage

of 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.








- 16 -








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 2009 and 2010 our President provided us $82,260and $12,744,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, Cordovano and Honeck, LLP., Certified Public Accountants, billed an aggregate of $940 for the fiscal year ended September 30, 2010 and  our former independent auditor, Ronald R. Chadwick, P.C billed an aggregate of $7,500 for the fiscal year ended September 30, 2009 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.








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:










- 17 -










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, 2010.








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 15, 2010.








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 15, 2010
By:
/s/ A. J. BoisdrenghienA. J. BoisdrenghienDirector












- 18 -