SOURCE: Franchise Capital Corporation

February 16, 2007 09:29 ET

Franchise Capital Corporation Files Definitive Proxy Material With March 13 Date for Annual Meeting

Company Also Updates Airing Dates for Aero Exhaust Feature on "Two Guys Garage" on SPEED Channel

TEMECULA, CA -- (MARKET WIRE) -- February 16, 2007 -- Franchise Capital Corporation (PINKSHEETS: FCCN) has filed definitive proxy material with the Securities and Exchange Commission for the company's annual meeting of shareholders, which has been scheduled for March 13, 2007.

The annual meeting of shareholders will be held at the company's corporate offices at 10:00 a.m. Pacific time for the following purpose of considering and voting upon an authorization for the Board of Directors to withdraw the company's election to be treated as a business development company (BDC) pursuant to Section 54(c) under the Investment Company Act.

Only shareholders of record at the close of business on February 21, 2007 will be entitled to vote at the meeting. A proxy statement will be sent to shareholders of record, and the mailing is expected to begin on or about February 28, 2007.

As of February 15, 2007, the company had 921,183,413 shares of common stock issued and outstanding. Of this amount 747,807,988 shares are held in an escrow account for the benefit of Golden Gate Investors, Inc. and are voted by the Franchise Capital Corporation's Chairman of the Board of Directors.

"We are pleased to have filed our Definitive 14A and look forward to the March 13 meeting, so that the withdrawal of the BDC election can be authorized by shareholders," said Steven R. Peacock, chief executive officer of Franchise Capital Corporation. "The BDC withdrawal is an important step in positioning Franchise Capital to be the suitable vehicle for Aero Exhaust to enter the public markets.

Franchise Capital has executed a definitive agreement to acquire the issued and outstanding shares of Aero Exhaust, Inc., a world leader in performance exhaust airflow technology and NASCAR Performance partner. The Board of Directors believes that to consummate the acquisition of Aero Exhaust and in the interest of the company's planned future operations, it is in the interest of Franchise Capital to withdraw its BDC election. Under former management, the company became aware that it might be out of compliance with the Investment Act of 1940, under which BDCs are regulated. These compliance issues were also taken into consideration by the Board in proposing the BDC withdrawal.

"Due to the compliance problems encountered by former management, we have made every possible effort to ensure that this proxy material meets with the approval of the appropriate regulatory agencies, so that our shareholders meeting can take place as soon as possible. We are confident that our meeting will be held on March 13th, and we are simultaneously moving forward with the completion and filing of past financial statements," Mr. Peacock added.

According to the information in the proxy material, Franchise Capital is presently having its financial statements audited or reviewed for all applicable periods and intends to file the appropriate period reports for all delinquent periods on or before March 15, 2007.

Franchise Capital also announced that due to coverage of this weekend's Daytona 500 Nextel Cup race, the airings of an in-program full Product Expo feature on Aero Exhaust's performance exhaust product for "Two Guys Garage" on SPEED Channel will air on Sunday, February 25th at 10:30am, Monday, Feb. 26th at 4:30pm, Friday, March 2nd at 10:00am. Re-airings will occur on Sunday, April 8th at 10:30am, Monday, April 9th at 4:30pm, and Friday, April 13th at 10:00am (all times Eastern Standard Time).

The Product Expo features NASCAR legend Rusty Wallace, the official spokesperson for Aero Exhaust products.

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About Aero Exhaust:

Aero Exhaust is a world leader in performance exhaust airflow technology, manufacturing and distributing the most technologically advanced muffler on the market. Its product lines are built to the highest industry standards and offer the consumer a lifetime warranty. Aero Exhaust has been issued U.S. and Australian patents on its innovations and development in the exhaust industry, and its mufflers are available worldwide through major retailers, mass merchant centers, automotive aftermarket supply stores and wholesalers. Aero Exhaust mufflers are an exclusive National Association for Stock Car Auto Racing (NASCAR) Performance product and carry the prestigious NASCAR brand on product, packaging and related media. NASCAR legend Rusty Wallace is the official spokesperson for Aero Exhaust products. Additional information on Aero Exhaust's products, race team, and motorsports ventures can be found on its corporate web site,

Safe Harbor Statement: The statements in this release that relate to future plans, expectations, events, performance and the like are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and the Securities Exchange Act of 1934. Actual results or events could differ materially from those described in the forward-looking statements due to a variety of factors, including the lack of funding, inability to complete required SEC filings, and others set forth in the Company's report on Form 10-K/A for fiscal year 2005 filed with the Securities and Exchange Commission.

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