<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)
U.S. Franchise Systems, Inc.
-------------------------------------------------------------------
(Name of Issuer)
Class A Common Stock, par value $0.01 per share
-----------------------------------------------------------------
(Title of Class of Securities)
902 956 30 9
-------------------------------------------------------------------
(CUSIP Number)
Stephen D. Aronson, Esq.
c/o U.S. Franchise Systems, Inc.
13 Corporate Square
Atlanta, GA 30329
Tel. No.: (404) 235-7463
------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
June 2, 2000
-----------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
Schedule because of Rule 13d-1(b)(3) or (4), check the following box. / /
<PAGE>
SCHEDULE 13D
--------------------------------------------------------------------------------
1. Name of Reporting Person:
Neal K. Aronson
--------------------------------------------------------------------------------
2. Check the Appropriate Box if a Member of a Group:
(a) / /
(b) /X/
--------------------------------------------------------------------------------
3. SEC Use Only
--------------------------------------------------------------------------------
4. Source of Funds: OO
--------------------------------------------------------------------------------
5. Check box if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(e) or 2(f):
/ /
--------------------------------------------------------------------------------
6. Citizenship or Place of Organization: U.S.A.
--------------------------------------------------
Number of 7. Sole Voting Power: 781,424 (See Exhibit A)
Shares --------------------------------------------------
Beneficially 8. Shared Voting Power: 111,347
Owned By --------------------------------------------------
Each 9. Sole Dispositive Power: 589,865
Reporting --------------------------------------------------
Person 10. Shared Dispositive Power: 0
With
--------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each
Reporting Person:
892,771 (See Exhibit A)
--------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares:
/ /
--------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in
Row (11): 5.2%
--------------------------------------------------------------------------------
14. Type of Reporting Person: IN
--------------------------------------------------------------------------------
2
<PAGE>
ITEM 1. SECURITY AND ISSUER.
The undersigned hereby amends the statement on Schedule 13D, dated
March 25, 1998 relating to the Class A Common Stock par value $.01 per share
(the "Class A Common Stock") of U.S. Franchise Systems, Inc., a Delaware
corporation (the "Company") whose principal executive office is located at 13
Corporate Square, Suite 250, Atlanta, Georgia 30329.
ITEM 4. PURPOSE OF TRANSACTION.
Item 4 of the Statement is hereby amended and restated to read in
its entirety as follows:
Prior to the Merger, Mr. Aronson was the Executive Vice President,
Chief Financial Officer and a director of USFS, and he assumed identical
positions with the Company following the Merger.
The Merger was effected in connection with the series of
transactions (the "Merger Transactions") designed to enable USFS to acquire
the entire interest in the Hawthorn Suites brand of hotels currently owned by
Hawthorn Suites Associates, an Illinois joint venture ("HSA"), and HSA
Properties, Inc., a Delaware corporation ("HPI"), through their ownership
collectively of a 99% membership interest in HSA Properties, L.L.C., a
Delaware limited liability company ("HSA LLC"). Prior to the Merger, USFS
owned the remaining 1% membership interest in HSA LLC. Immediately prior to
the Merger, pursuant to a Contribution Agreement (the "Contribution
Agreement"), dated as of December 9, 1997, by and among HSA, HPI, the Company
and USFS, HSA and HPI assigned, transferred and conveyed to the Company (the
"Transfer") all of their respective ownership interests in HSA LLC. Pursuant
to the Transfer, HPI acquired 22,447 shares of Company Class A Common Stock,
and HSA acquired 2,199,775 shares of Company Class A Common Stock.
By virtue of the Merger and the Contribution Agreement, the Company
acquired the remaining 99% interest in HSA LLC which USFS had not already
owned. Prior to the Merger, USFS and HSA LLC were parties to the Master
Franchise Agreement, dated as of March 27, 1996 (the "Hawthorn Acquisition
Agreement"), pursuant to which USFS acquired the exclusive, worldwide rights
to franchise and to control the development and operation of the Hawthorn
Suites brand of hotels. The Hawthorn Acquisition Agreement required that a
percentage of royalties received by USFS from the franchising of Hawthorn
Suites hotels be remitted to HSA LLC and also contained certain restrictions
on USFS's operations and imposed certain standards relating to the
development of the Hawthorn Suites brand of hotels. Accordingly, USFS
acquired HSA LLC, through the Merger and the Contribution Agreement, in order
to eliminate these restrictions.
3
<PAGE>
On June 2, 2000 the Company, SDI, Inc.("SDI"), Meridian Associates,
L.P. ("Meridian") and HPI entered into a Recapitalization Agreement(the
"Recapitalization Agreement") pursuant to which the Company will commence a
tender offer to purchase (the "Offer") up to an aggregate of 8,666,666 but
not less than 3,000,000, shares of Common Stock and SDI will purchase 75,000
shares of preferred stock of the Company for an aggregate of $75,000,000.
Upon consummation of the transactions contemplated by the Recapitalization
Agreement, SDI, Meridian and HPI (the "Pritzker Entities") will have control
of the Company.
In connection with the Recapitalization Agreement, Mr. Aronson entered
into a voting agreement with Meridian (the "Aronson Agreement"). The Pritzker
Entities may be deemed to have acquired beneficial ownership of 892,771
shares of Class A Common Stock held by Mr. Aronson because the Aronson
Agreement requires Aronson to vote his shares, at the upcoming annual meeting
of stockholders, in favor of (i) the issuance to SDI of two new series of the
Company's preferred stock and the issuance of Class A Common Stock upon the
conversion thereof in accordance with the Recapitalization Agreement and (ii)
amendments to the Company's Certificate of Incorporation which shall result
in (1) the elimination of the provisions prohibiting stockholder action by
written consent, (2) the elimination of the provisions requiring
supermajority voting and (3) the addition of various protections for minority
stockholders of the Company after consummation of the Offer, including (a)
the inclusion of at least three independent directors on the Board of
Directors, and (b) a minimum price at which the Company may purchase Shares
on the open market, pursuant to a tender offer or exchange, or by any other
transaction. Mr. Aronson has agreed to tender all of his shares in the Offer.
All of Aronson's shares of Class B Common Stock not purchased in the Offer
shall be converted into shares of Class A Common Stock. The complete text of
the Recapitalization Agreement and the documents executed in connection
therewith, including the Aronson Agreement, have been attached as an exhibit
to the Current Report on Form 8-K filed by the Company on June 6, 2000 and
are hereby incorporated herein by reference.
Pursuant to the Aronson Agreement, Mr. Aronson has agreed to vote
his shares as described above and therefore may be deemed to
4
<PAGE>
have granted to the Pritzker Entities beneficial ownership over 892,771
shares of Class A Common Stock and 1,509,473 shares of Class B Common Stock,
par value $.01 per share, of the Company. Shares of Class B Common Stock have
the right to vote 10 votes per share. Although the Pritzker Entities share
beneficial ownership with respect to shares held by Aronson, Mr. Aronson does
not have any voting or dispositive power over any shares held by any of the
Pritzker Entities. Mr. Aronson does not believe that he is a part of any
"group" consisting of the Pritzker Entities under Section 13d and therefore
Mr. Aronson is not required to consider shares beneficially owned by the
Pritzker Entities in the calculation of his beneficial ownership of shares.
One of the conditions to the closing of the Recapitalization
Agreement is that all of the members of the Board of Directors of the
Company, other than Mr. Leven, Steven N. Romaniello and Douglas G. Geoga,
shall have resigned. The remaining members of the Board of Directors will
then take all necessary steps to cause the Board of Directors to consist of
eleven members immediately following the effective time of the resignations.
The three remaining members of the Board of Directors shall then appoint
three independent directors and five other directors as will be designated by
the Pritzker Entities.
5
<PAGE>
The transactions contemplated by the Recapitalization Agreement may
cause the Company to become eligible for termination of registration pursuant
to Section 12(g)(4) of the Act. However, under the Recapitalization
Agreement, the Pritzker Entities agreed to use reasonable efforts to cause
the Class A Common Stock to continue to be listed on Nasdaq which will
require that the Class A Common Stock continue to be registered under the
Act. The Pritzker Entities have also stated in a Schedule 13D Statement filed
June 13, 2000 that they "do not expect: (i) the issuance of the preferred
stock in connection with the Recapitalization Agreement or (ii) the purchase
of up to an aggregate of 8,666,666 shares of Class A Common Stock including
shares of Class A Common Stock issuable upon the conversion of shares of
Class B Common Stock from its stockholders in the Offer to cause the Class A
Common Stock to be delisted from the Nasdaq National Market." There can be no
assurance, however, that consummation of such transactions will not result in
such delisting or deregistration.
Except as set forth in this Item 4, Mr. Aronson, in his individual
capacity, does not have any plans or proposals that relate to or would result
in any of the actions specified in clauses (a) through (j) of Item 4 of
Schedule 13D.
Notwithstanding the above, Mr. Aronson may, in his capacity as an
executive officer and/or director of the Company, have plans or proposals
relating to items (a) through (j) of Item 4 of Schedule 13D and to such
extent Mr. Aronson declines to indicate such plans or proposals, and
disclaims any obligation to update such disclosure, except to the extent they
derive from his status as a
6
<PAGE>
shareholder instead of an executive officer and/or director. In addition, Mr.
Aronson may, at any time and from time to time, and reserves the right to,
acquire additional securities of the Company, dispose of any such securities
of the Company or formulate plans or proposals regarding the Company or its
securities, to the extent deemed advisable by Mr. Aronson in light of his
general investment policy, market conditions or other factors.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
Item 5 of the Schedule 13D is hereby amended and restated to read in its
entirety as follows:
(a) Mr. Aronson beneficially owns 892,771 shares of the issued and
outstanding Company Class A Common Stock and 1,509,473 shares of the issued
and outstanding Company Class B Common Stock.
Mr. Aronson's shares of Company Class A Common Stock constitute 5.2%
of the issued and outstanding Company Class A Common Stock. Each share of
Company Class A Common Stock is entitled to one vote.
Mr. Aronson's 1,509,473 shares of Company Class B Common Stock
constitute 55.7% of the issued and outstanding shares of Company Class B
Common Stock. Each share of Company Class B Common Stock is entitled to 10
votes per share.
(b) Mr. Aronson has sole voting power over 781,724 shares of Company
Class A Common Stock. Pursuant to a voting agreement, Mr. Aronson has
transferred voting power to Mr. Leven with respect to 111,347 shares of
Company Class A Common Stock, to which Mr. Aronson has shared voting power
with Mr. Leven.
Mr. Leven is Chief Executive Officer of the Company. His address is
13 Corporate Square, Suite 250, Atlanta, GA 30329.
Mr. Leven is a citizen of the United States. During the last five
years, Mr. Leven has not been convicted in a criminal proceeding(excluding
traffic violations or similar misdemeanors) nor has Mr. Leven been a party to
a civil proceeding of a judicial or administrative body of competent
jurisdiction with the result of such proceeding being that Mr. Leven is
subject to a judgment, decree, or final order enjoining future violations of,
or
7
<PAGE>
prohibiting or mandating activities subject to federal or state securities
laws or finding any violation with respect to such laws.
(c) Mr. Aronson has not effected any transactions in any shares of
Company Class A Common Stock during the past sixty (60) days.
(d) Members of management of the Company who own an aggregate of
302,906 shares of Company Class A Common Stock, and who are required to vote
them in the same manner as Mr. Aronson votes his shares, have the right to
receive dividends from or direct the proceeds from a sale of such securities.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
The following paragraph is hereby added at the end of Item 6 of the
Statement.
See the information in Item 4, which is incorporated into this Item
6.
In connection with the execution of the Recapitalization Agreement,
the Company will enter into a Registration Rights Agreement effective upon
the closing of the Recapitalization Agreement with the Pritzker Entities, Mr.
Aronson, and certain other holders of Class A Common Stock (the "Registration
Rights Agreement"). The Registration Rights Agreement grants the Pritzker
Entities the right to demand on three separate occasions that USFS, at its
expense, register the Reporting Entities' unregistered shares of Class A
Common Stock under the Securities Act of 1933, as amended. Mr. Aronson may
include his shares of Class A Common Stock in any such demand registration.
The Pritzker Entities and Aronson may also include their shares of Class A
Common Stock in any registration initiated by USFS. In each case, the shares
requested to be registered are subject to limitations or reductions depending
upon the circumstances of the offering. The complete text of the Registration
Rights Agreement is attached as an exhibit to the Recapitalization Agreement.
8
<PAGE>
The Recapitalization Agreement requires the Company to take all
actions as are necessary to cause all Restricted Shares to become
Unrestricted Shares immediately before the consummation of the transactions
contemplated thereby, but subject to such consummation. Mr. Aronson currently
holds 589,865 Restricted Shares.
ITEM 7. ITEM 7. MATERIALS TO BE FILED AS EXHIBITS.
The following are added at the end of Item 7 of the Schedule 13D.
Exhibit 1 Aronson Agreement incorporated by reference from
Exhibit 2.1 to the Current Report on Form 8-K of
the Company filed June 6, 2000.
Exhibit 2 Registration Rights Agreement incorporated by
reference from Exhibit 2.1 to the Current Report
on Form 8-K of the Company filed June 6, 2000.
Exhibit 3 Recapitalization Agreement incorporated by
reference from Exhibit 2.1 to the Current Report
on Form 8-K of the Company filed June 6, 2000.
9
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete
and correct.
Dated: June 27, 2000
/s/ Neal K. Aronson
----------------------------------
Neal K. Aronson
10
<PAGE>
Schedule A of the Schedule 13D is hereby amended and restated to read in its
entirety as follows:
EXHIBIT A
Breakdown of Shares of Class A Common Stock
Neal K. Aronson
--------------------------------------------------------------------------------
589,865 Restricted Shares owned directly by Mr. Aronson. Mr. Aronson has
transferred to Mr. Leven voting control over 111,347 of these shares.
206,934 Unrestricted Shares which have been reallocated to other members of
management which are voted in the same manner as Mr. Aronson votes his shares.
Mr. Aronson disclaims beneficial ownership of these shares.
95,972 Restricted Shares which have been reallocated to other members of
management which are voted in the same manner as Mr. Aronson votes his
Unrestricted Shares. Mr. Aronson disclaims beneficial ownership of these shares.
Total=892,771=5.2%
