SUPPLEMENT DATED MAY 12, 1997
                              TO THE PROSPECTUS OF
                           FRANKLIN PARTNERS FUNDS(R)
                                DATED MAY 1, 1997

On May 9, 1997, Shareholders of the Franklin Tax-Advantaged International Bond
Fund (the "Fund") approved its liquidation, which will be accomplished by
distributing the value of the assets of the Fund to Shareholders in proportion
to each Shareholder's interest in the Fund.

Shares are no longer available to persons who are not already shareholders in
the Fund. Except as provided below, additional investments by U.S. and non-U.S.
Shareholders will no longer be accepted.

Until the liquidation of the Fund, which is presently expected to occur on or
about June 27, 1997, an investor may purchase shares of the Fund: 1) to exercise
the dividend reinvestment option; 2) to purchase shares of the same class within
365 days of a redemption; 3) to exchange from another Franklin Templeton Fund,
provided a sales charge will not be incurred in the exchange; 4) to complete a
Letter of Intent; 5) through an existing automatic payroll deduction or
automatic investment plan; or 6) for an IRA or similar tax-deferred account with
an existing account in the Fund.

Any investor who chooses to purchase shares under any of these options should
carefully consider the effect which the liquidation of the Fund and the
distribution of the Fund's assets will have upon the investor and on the shares
being purchased.