Franklin Fund Allocator Series

Annual Report and Shareholder Letter December 31, 2017 Franklin Fund Allocator Series Franklin Corefolio Franklin Founding Funds Sign up for electronic delivery at franklintempleton.com/edelivery

Franklin Templeton Investments Gain From Our Perspective At Franklin Templeton Investments, we re dedicated to one goal: delivering exceptional asset management for our clients. By bringing together multiple, world-class investment teams in a single firm, we re able to offer specialized expertise across styles and asset classes, all supported by the strength and resources of one of the world s largest asset managers. This has helped us to become a trusted partner to individual and institutional investors across the globe. Dear Shareholder: During the 12 months ended December 31, 2017, mostly upbeat economic data, improved corporate earnings and supportive monetary policies were positives for US securities markets. After two rate increases earlier in 2017, at its December meeting the US Federal Reserve (Fed) raised the target range for its benchmark federal funds rate 0.25% to 1.25% 1.50% amid ongoing labor market strength, rising economic activity and low inflation in the US. The Fed also announced a gradual monthly reduction in its balance sheet starting in January of 2018 as part of its ongoing plan to normalize monetary policy. In this environment, US stocks, as measured by the Standard & Poor s 500 Index, ended the period with a +21.83% total return. 1 Stocks in global developed markets, as measured by the MSCI World Index, returned +23.07% for the same period. 1 Investment-grade bonds, as measured by the Bloomberg Barclays US Aggregate Bond Index, posted a +3.54% 12-month total return. 1 We are committed to our long-term perspective and disciplined investment approach as we conduct a rigorous, fundamental analysis of securities with a regular emphasis on investment risk management. We believe active, professional investment management serves investors well. We also recognize the important role of financial advisors in today s markets and encourage investors to continue to seek their advice. Amid changing markets and economic conditions, we are confident investors with a well-diversified portfolio and a patient, long-term outlook should be well positioned for the years ahead. In addition, Franklin Fund Allocator Series annual report includes more detail about prevailing conditions and a discussion about investment decisions during the period. Please remember all securities markets fluctuate, as do mutual fund share prices. We thank you for investing with Franklin Templeton, welcome your questions and comments, and look forward to serving your future investment needs. Sincerely, Rupert H. Johnson, Jr. Chairman Franklin Fund Allocator Series This letter reflects our analysis and opinions as of December 31, 2017, unless otherwise indicated. The information is not a complete analysis of every aspect of any market, country, industry, security or fund. Statements of fact are from sources considered reliable. 1. Source: Morningstar. See www.franklintempletondatasources.com for additional data provider information. Not FDIC Insured May Lose Value No Bank Guarantee franklintempleton.com Not part of the annual report 1

Contents Annual Report Economic and Market Overview... 3 Franklin Corefolio... 4 Franklin Founding Funds... 10 Financial Highlights and Statements of Investments... 16 Financial Statements... 28 Notes to Financial Statements... 31 Report of Independent Registered Public Accounting Firm... 39 Tax Information... 40 Special Meeting of Shareholders... 42 Board Members and Officers... 44 Shareholder Information... 48 Visit franklintempleton.com for fund updates, to access your account, or to find helpful financial planning tools. 2 Annual Report franklintempleton.com

Annual Report Economic and Market Overview The global economy grew moderately during the 12-month period under review. In this environment, global developed and emerging market stocks generated a +24.62% total return, as measured by the MSCI All Country World Index. 1 Global markets were aided by price gains in oil and other commodities, generally upbeat economic data across regions, the European Central Bank s (ECB s) extension of its monetary easing program, and investor optimism about pro-growth and pro-business policies in the US. The prospect for reforms in the European Union (EU) with Emmanuel Macron s election as France s president, encouraging corporate earnings reports and the passage of the US tax reform bill also supported global stocks. However, global markets reflected investor concerns about the terms of the UK s exit from the EU, political uncertainty in the US and the EU, and geopolitical tensions in the Korean peninsula and other regions. Other concerns included the health of European banks, global oil oversupply despite a pact by major oil-producing countries to extend production cuts, and comments from key central bankers around the world about potentially raising interest rates. After strengthening in 2017 s second and third quarters, the US economy moderated in the fourth quarter. The economy grew faster in 2017 than in 2016, however, largely due to growth in consumer spending, business investment and exports. The unemployment rate decreased from 4.7% in December 2016 to 4.1% at period-end. 2 Annual inflation, as measured by the Consumer Price Index, was 2.1% in December 2016, and while it varied over the 12-month period, remained unchanged at period-end. 2 The US Federal Reserve (Fed) raised its target range for the federal funds rate 0.25% three times during the period, amid signs of a growing US economy, strengthening labor market and improving business spending. At its December meeting, the Fed confirmed that the monthly balance sheet reduction would increase from US$10 billion to US$20 billion beginning in January 2018. economic growth rate was the fastest in a decade. The ECB kept its benchmark interest rate unchanged during the period. However, at its October meeting, the ECB extended the time frame for its massive bond-buying program from December 2017 to at least September 2018, while reducing the amount of monthly bond purchases in half beginning in January 2018. In Asia, Japan s quarterly gross domestic product (GDP) grew for the seventh consecutive quarter, although third-quarter 2017 growth was lower than the previous quarter. The Bank of Japan left its benchmark interest rate unchanged during the period and continued its monetary stimulus measures. In emerging markets, Brazil s quarterly GDP grew for the third consecutive quarter, although third-quarter 2017 growth slowed from the previous quarter. The country s central bank cut its benchmark interest rate several times during the period to spur economic growth. Russia s GDP grew in 2017 s first three quarters compared to the prior-year periods, amid the Bank of Russia s continued policy support. China s GDP grew faster in 2017 than in 2016, supported by solid growth in industrial production, services, fixed-asset investment, retail sales, and imports and exports. The People s Bank of China left its benchmark interest rate unchanged during the period. Overall, emerging market stocks, as measured by the MSCI Emerging Markets Index, rose substantially during the period. The foregoing information reflects our analysis and opinions as of December 31, 2017. The information is not a complete analysis of every aspect of any market, country, industry, security or fund. Statements of fact are from sources considered reliable. In Europe, the UK s economic growth moderated in 2017 compared to 2016, largely due to slower growth in the services sector. In November, the Bank of England raised its key policy rate 0.25%, its first increase in a decade. The eurozone s growth accelerated in 2017 s second and third quarters, but moderated in the third quarter. However, the eurozone s 2017 1. Source: Morningstar. 2. Source: US Bureau of Labor Statistics. See www.franklintempletondatasources.com for additional data provider information. franklintempleton.com Annual Report 3

Franklin Corefolio This annual report for Franklin Corefolio covers the fiscal year ended December 31, 2017. Your Fund s Goal and Main Investments The Fund seeks capital appreciation through investments in a combination of Franklin Growth Fund, Franklin Growth Opportunities Fund, Franklin Mutual Shares Fund and Templeton Growth Fund. Asset Allocation* Based on Total Net Assets as of 12/31/17 Domestic Equity Foreign Equity Short-Term Investments & Other Net Assets -0.1% Performance Overview 25.1% 75.0% *The asset allocation is based on the Statement of Investments (SOI), which classifies each underlying fund into a broad asset class. The Fund s Class A shares had a +20.07% cumulative total return for the 12 months under review. In comparison, the Fund s benchmarks, the Standard & Poor s 500 Index (S&P 500 ), which is a broad measure of US stock performance, generated a +21.83% cumulative total return, and the MSCI World Index, which tracks equity performance in global developed markets, had a +23.07% total return. 1 You can find the Fund s long-term performance data in the Performance Summary beginning on page 6. Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236. Investment Strategy The Fund invests its assets allocated approximately 25% each in Franklin Growth Fund, Franklin Growth Opportunities Fund, Franklin Mutual Shares Fund and Templeton Growth Fund. These underlying funds, in turn, invest primarily in US and foreign equity securities and, to a lesser extent, fixed income and money market securities. As market conditions affect the underlying funds, we rebalance the Fund s allocations to maintain the predetermined weightings in each underlying fund whenever the actual allocations exceed plus or minus 3% of the fixed allocation percentages. Portfolio Review The Fund s performance can be attributed largely to maintaining a relatively static allocation among domestic and foreign equities, fixed income securities, and short-term investments and other net assets, and to the actual performance of the selected underlying funds. During the period under review, Franklin Growth Fund Class R6 and Franklin Growth Opportunities Fund Class R6 outperformed the S&P 500, while Franklin Mutual Shares Fund Class R6 underperformed the index. Templeton Growth Fund Class R6 underperformed the MSCI World Index. 1. Source: Morningstar. The indexes are unmanaged and include reinvested distributions. They do not reflect any fees, expenses or sales charges. One cannot invest directly in an index, and an index is not representative of the Fund s portfolio. See www.franklintempletondatasources.com for additional data provider information. The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund s SOI, which begins on page 21. 4 Annual Report franklintempleton.com

FRANKLIN COREFOLIO ALLOCATION FUND Thank you for your continued participation in Franklin Corefolio. We look forward to serving your future investment needs. T. Anthony Coffey, CFA Vice President of Franklin Advisers, Inc. The foregoing information reflects our analysis, opinions and portfolio holdings as of December 31, 2017, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy. CFA is a trademark owned by CFA Institute. franklintempleton.com Annual Report 5

FRANKLIN COREFOLIO ALLOCATION FUND Performance Summary as of December 31, 2017 The performance table and graphs do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares. Total return reflects reinvestment of the Fund s dividends and capital gain distributions, if any, and any unrealized gains or losses. Your dividend income will vary depending on dividends or interest paid by securities in the Fund s portfolio, adjusted for operating expenses of each class. Capital gain distributions are net profits realized from the sale of portfolio securities. Performance as of 12/31/17 Cumulative total return excludes sales charges. Average annual total return includes maximum sales charges. Sales charges will vary depending on the size of the investment and the class of share purchased. The maximum is 5.75% and the minimum is 0%. Class A: 5.75% maximum initial sales charge; Advisor Class: no sales charges. For other share classes, visit franklintempleton.com. Share Class Cumulative Total Return 1 Average Annual Total Return 2 A 1-Year +20.07% +13.17% 5-Year +78.13% +10.92% 10-Year +84.47% +5.69% Advisor 1-Year +20.40% +20.40% 5-Year +80.52% +12.54% 10-Year +89.63% +6.61% Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236. See page 8 for Performance Summary footnotes. 6 Annual Report franklintempleton.com

FRANKLIN COREFOLIO ALLOCATION FUND PERFORMANCE SUMMARY Total Return Index Comparison for a Hypothetical $10,000 Investment Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged indexes include reinvestment of any income or distributions. They differ from the Fund in composition and do not pay management fees or expenses. One cannot invest directly in an index. Class A (1/1/08 12/31/17) $25,000 $20,000 $15,000 $22,603 $17,384 $17,301 $10,000 $5,000 $0 1/08 12/09 12/11 12/13 12/15 12/17 Franklin Corefolio S&P 500 3 MSCI World Index 3 Advisor Class (1/1/08 12/31/17) $25,000 $20,000 $15,000 $22,603 $18,963 $17,301 $10,000 $5,000 $0 1/08 12/09 12/11 12/13 12/15 12/17 Franklin Corefolio S&P 500 3 MSCI World Index 3 franklintempleton.com Annual Report 7

FRANKLIN COREFOLIO ALLOCATION FUND PERFORMANCE SUMMARY Distributions (1/1/17 12/31/17) Share Class Net Investment Income Short-Term Capital Gain Long-Term Capital Gain Total A $0.1820 $0.0192 $0.5779 $0.7791 C $0.0343 $0.0192 $0.5779 $0.6314 R $0.1347 $0.0192 $0.5779 $0.7318 R6 (8/1/17 12/31/17) $0.2469 $0.0192 $0.2292 $0.4953 Advisor $0.2333 $0.0192 $0.5779 $0.8304 Total Annual Operating Expenses 4 Share Class A 1.04% Advisor 0.79% Each class of shares is available to certain eligible investors and has different annual fees and expenses, as described in the prospectus. All investments involve risks, including possible loss of principal. Because the Fund invests in underlying funds that may engage in a variety of investment strategies involving certain risks, the Fund may be subject to those same risks. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general conditions. Foreign investing carries additional risks such as currency and market volatility, and political or social instability; risks that are heightened in developing countries. Smaller or relatively new or unseasoned companies can be particularly sensitive to changing economic conditions, and their prospects for growth are less certain than those of larger, more established companies. Value securities may not increase in price as anticipated or may decline further in value. The Fund includes investments in specialized industry sectors such as the technology sector, which has been among the most volatile in the market. The Fund s prospectus also includes a description of the main investment risks. 1. Cumulative total return represents the change in value of an investment over the periods indicated. 2. Average annual total return represents the average annual change in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized. 3. Source: Morningstar. The S&P 500 is a market capitalization-weighted index of 500 stocks designed to measure total US Equity Market performance. The MSCI World Index is a free float-adjusted, market capitalization-weighted index designed to measure equity market performance in global developed markets. 4. Figures are as stated in the Fund s current prospectus, including the effect of acquired fund fees and expenses, and may differ from the expense ratios disclosed in the Your Fund s Expenses and Financial Highlights sections in this report. In periods of volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown. See www.franklintempletondatasources.com for additional data provider information. 8 Annual Report franklintempleton.com

FRANKLIN COREFOLIO ALLOCATION FUND Your Fund s Expenses As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including sales charges (loads) on Fund purchases and redemptions; and (2) ongoing Fund costs, including management fees, distribution and service (12b-1) fees, and other Fund expenses. All mutual funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other mutual funds. The table assumes a $1,000 investment held for the six months indicated. Actual Fund Expenses The table below provides information about actual account values and actual expenses in the columns under the heading Actual. In these columns the Fund s actual return, which includes the effect of Fund expenses, is used to calculate the Ending Account Value for each class of shares. You can estimate the expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600 $1,000 = 8.6). Then multiply the result by the number in the row for your class of shares under the headings Actual and Expenses Paid During Period (if Actual Expenses Paid During Period were $7.50, then 8.6 x $7.50 = $64.50). In this illustration, the actual expenses paid this period are $64.50. Hypothetical Example for Comparison with Other Funds Under the heading Hypothetical in the table, information is provided about hypothetical account values and hypothetical expenses based on the Fund s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund s actual return. This information may not be used to estimate the actual ending account balance or expenses you paid for the period, but it can help you compare ongoing costs of investing in the Fund with those of other funds. To do so, compare this 5% hypothetical example for the class of shares you hold with the 5% hypothetical examples that appear in the shareholder reports of other funds. Please note that expenses shown in the table are meant to highlight ongoing costs and do not reflect any transactional costs. Therefore, information under the heading Hypothetical is useful in comparing ongoing costs only, and will not help you compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher. Share Class Beginning Account Value 1 Actual (actual return after expenses) Ending Account Value 12/31/17 Expenses Paid During Period 2,3 Hypothetical (5% annual return before expenses) Ending Account Value 12/31/17 Expenses Paid During Period 7/1/17 12/31/17 3 Net Annualized Expense Ratio A $1,000 $1,078.70 $2.41 $1,022.89 $2.35 0.46% C $1,000 $1,074.70 $6.33 $1,019.11 $6.16 1.21% R $1,000 $1,077.30 $3.72 $1,021.63 $3.62 0.71% R6 $1,000 $1,052.80 $0.30 $1,020.67 $0.30 0.07% Advisor $1,000 $1,080.10 $1.10 $1,024.15 $1.07 0.21% 1. For Classes A, C, R and Advisor, 7/1/17 for Actual and Hypothetical. For Class R6, 8/1/17 for Actual and 7/1/17 for Hypothetical. 2. For Classes A, C, R and Advisor, 7/1/17 12/31/17. For Class R6, 8/1/17 12/31/17. 3. Expenses are equal to the annualized expense ratio for the six-month period as indicated above in the far right column multiplied by the simple average account value over the period indicated, and then multiplied by 184/365 to reflect the one-half year period. The multiplier is 153/365 for Actual Class R6 expenses to reflect the number of days since inception. franklintempleton.com Annual Report 9

Franklin Founding Funds This annual report for Franklin Founding Funds Allocation Fund covers the fiscal year ended December 31, 2017. Your Fund s Goal and Main Investments The Fund s principal investment goal is capital appreciation, with a secondary goal of income. The Fund invests in an equally weighted combination of Franklin Income Fund, Franklin Mutual Shares Fund and Templeton Growth Fund. Asset Allocation* Based on Total Net Assets as of 12/31/17 Foreign Equity Domestic Equity Domestic Hybrid Short-Term Investments & Other Net Assets -0.1% Performance Overview 33.4% 33.4% 33.3% *The asset allocation is based on the Statement of Investments (SOI), which classifies each underlying fund into a broad asset class. The Fund s Class A shares had a +11.20% cumulative total return for the 12 months under review. In comparison, the Fund s benchmarks, the Standard & Poor s 500 Index (S&P 500), which is a broad measure of US stock performance, generated a +21.83% total return and the MSCI World Index, which tracks equity performance in global developed markets, had a +23.07% total return. 1 You can find the Fund s long-term performance data in the Performance Summary beginning on page 12. Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236. Investment Strategy The Fund invests its assets in an equally weighted combination of Franklin Income Fund, Franklin Mutual Shares Fund and Templeton Growth Fund. These underlying funds, in turn, invest primarily in US and foreign equity securities and, to a lesser extent, fixed income and money market securities. As market conditions affect the underlying funds, we rebalance the Fund s allocations to maintain the predetermined equal weightings of approximately 33⅓% of total net assets in each underlying fund whenever the actual allocations exceed plus or minus 3% of the fixed allocation percentages. Portfolio Review The Fund s performance can be attributed largely to maintaining a relatively static allocation among domestic and foreign equities, fixed income securities, and short-term investments and other net assets, and to the actual performance of the selected underlying funds. During the period under review, Franklin Income Fund Class R6 and Franklin Mutual Shares Fund Class R6 underperformed the S&P 500. Templeton Growth Fund Class R6 underperformed the MSCI World Index. 1. Source: Morningstar. The indexes are unmanaged and include reinvested distributions. They do not reflect any fees, expenses or sales charges. One cannot invest directly in an index, and an index is not representative of the Fund s portfolio. See www.franklintempletondatasources.com for additional data provider information. The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund s SOI, which begins on page 27. 10 Annual Report franklintempleton.com

FRANKLIN FOUNDING FUNDS ALLOCATION FUND Thank you for your continued participation in Franklin Founding Funds. We look forward to serving your future investment needs. T. Anthony Coffey, CFA Vice President of Franklin Advisers, Inc. The foregoing information reflects our analysis, opinions and portfolio holdings as of December 31, 2017, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy. franklintempleton.com Annual Report 11

FRANKLIN FOUNDING FUNDS ALLOCATION FUND Performance Summary as of December 31, 2017 The performance table and graphs do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares. Total return reflects reinvestment of the Fund s dividends and capital gain distributions, if any, and any unrealized gains or losses. Your dividend income will vary depending on dividends or interest paid by securities in the Fund s portfolio, adjusted for operating expenses of each class. Capital gain distributions are net profits realized from the sale of portfolio securities. Performance as of 12/31/17 Cumulative total return excludes sales charges. Average annual total return includes maximum sales charges. Sales charges will vary depending on the size of the investment and the class of share purchased. The maximum is 5.75% and the minimum is 0%. Class A: 5.75% maximum initial sales charge; Advisor Class: no sales charges. For other share classes, visit franklintempleton.com. Share Class Cumulative Total Return 1 Average Annual Total Return 2 A 1-Year +11.20% +4.82% 5-Year +50.71% +7.27% 10-Year +55.92% +3.93% Advisor 1-Year +11.58% +11.58% 5-Year +52.66% +8.83% 10-Year +60.05% +4.82% Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236. See page 14 for Performance Summary footnotes. 12 Annual Report franklintempleton.com

FRANKLIN FOUNDING FUNDS ALLOCATION FUND PERFORMANCE SUMMARY Total Return Index Comparison for a Hypothetical $10,000 Investment Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged indexes include reinvestment of any income or distributions. They differ from the Fund in composition and do not pay management fees or expenses. One cannot invest directly in an index. Class A (1/1/08 12/31/17) $25,000 $20,000 $15,000 $22,603 $17,301 $14,699 $10,000 $5,000 $0 1/08 12/09 12/11 12/13 12/15 12/17 Franklin Founding Funds S&P 500 3 MSCI World Index 3 Advisor Class (1/1/08 12/31/17) $25,000 $20,000 $15,000 $22,603 $17,301 $16,005 $10,000 $5,000 $0 1/08 12/09 12/11 12/13 12/15 12/17 Franklin Founding Funds S&P 500 3 MSCI World Index 3 franklintempleton.com Annual Report 13

FRANKLIN FOUNDING FUNDS ALLOCATION FUND PERFORMANCE SUMMARY Distributions (1/1/17 12/31/17) Share Class Net Investment Income A $0.4284 C $0.3167 R $0.3802 R6 (8/1/17 12/31/17) $0.2003 Advisor $0.4662 Total Annual Operating Expenses 4 Share Class A 1.00% Advisor 0.75% Each class of shares is available to certain eligible investors and has different annual fees and expenses, as described in the prospectus. All investments involve risks, including possible loss of principal. Because the Fund invests in underlying funds that may engage in a variety of investment strategies involving certain risks, the Fund is subject to these same risks. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Bonds are affected by changes in interest rates and the creditworthiness of their issuers. Bond prices generally move in the opposite direction of interest rates. Thus, as the prices of bonds adjust to a rise in interest rates, the Fund s share price may decline. Higher yielding, lower rated corporate bonds entail a greater degree of credit risk compared to investment-grade securities. Foreign investing carries additional risks such as currency and market volatility and political or social instability, risks that are heightened in developing countries. Value securities may not increase in price as anticipated or may decline further in value. The Fund s prospectus also includes a description of the main investment risks. 1. Cumulative total return represents the change in value of an investment over the periods indicated. 2. Average annual total return represents the average annual change in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized. 3. Source: Morningstar. The S&P 500 is a market capitalization-weighted index of 500 stocks designed to measure total US Equity Market performance. The MSCI World Index is a free float-adjusted, market capitalization-weighted index designed to measure equity market performance in global developed markets. 4. Figures are as stated in the Fund s current prospectus, including the effect of acquired fund fees and expenses, and may differ from the expense ratios disclosed in the Your Fund s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown. See www.franklintempletondatasources.com for additional data provider information. 14 Annual Report franklintempleton.com

FRANKLIN FOUNDING FUNDS ALLOCATION FUND Your Fund s Expenses As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including sales charges (loads) on Fund purchases and redemptions; and (2) ongoing Fund costs, including management fees, distribution and service (12b-1) fees, and other Fund expenses. All mutual funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other mutual funds. The table assumes a $1,000 investment held for the six months indicated. Actual Fund Expenses The table below provides information about actual account values and actual expenses in the columns under the heading Actual. In these columns the Fund s actual return, which includes the effect of Fund expenses, is used to calculate the Ending Account Value for each class of shares. You can estimate the expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600 $1,000 = 8.6). Then multiply the result by the number in the row for your class of shares under the headings Actual and Expenses Paid During Period (if Actual Expenses Paid During Period were $7.50, then 8.6 x $7.50 = $64.50). In this illustration, the actual expenses paid this period are $64.50. Hypothetical Example for Comparison with Other Funds Under the heading Hypothetical in the table, information is provided about hypothetical account values and hypothetical expenses based on the Fund s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund s actual return. This information may not be used to estimate the actual ending account balance or expenses you paid for the period, but it can help you compare ongoing costs of investing in the Fund with those of other funds. To do so, compare this 5% hypothetical example for the class of shares you hold with the 5% hypothetical examples that appear in the shareholder reports of other funds. Please note that expenses shown in the table are meant to highlight ongoing costs and do not reflect any transactional costs. Therefore, information under the heading Hypothetical is useful in comparing ongoing costs only, and will not help you compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher. Share Class Beginning Account Value 1 Actual (actual return after expenses) Ending Account Value 12/31/17 Expenses Paid During Period 2,3 Hypothetical (5% annual return before expenses) Ending Account Value 12/31/17 Expenses Paid During Period 7/1/17 12/31/17 3 Net Annualized Expense Ratio A $1,000 $1,043.80 $2.16 $1,023.09 $2.14 0.42% C $1,000 $1,040.90 $6.02 $1,019.31 $5.96 1.17% R $1,000 $1,042.80 $3.45 $1,021.83 $3.41 0.67% R6 $1,000 $1,000.60 $0.25 $1,020.71 $0.25 0.06% Advisor $1,000 $1,045.70 $0.88 $1,024.35 $0.87 0.17% 1. For Classes A, C, R and Advisor, 7/1/17 for Actual and Hypothetical. For Class R6, 8/1/17 for Actual and 7/1/17 for Hypothetical. 2. For Classes A, C, R and Advisor, 7/1/17 12/31/17. For Class R6, 8/1/17 12/31/17. 3. Expenses are equal to the annualized expense ratio for the six-month period as indicated above in the far right column multiplied by the simple average account value over the period indicated, and then multiplied by 184/365 to reflect the one-half year period. The multiplier is 153/365 for Actual Class R6 expenses to reflect the number of days since inception. franklintempleton.com Annual Report 15

Financial Highlights Franklin Corefolio Year Ended December 31, 2017 2016 2015 2014 2013 Class A Per share operating performance (for a share outstanding throughout the year) Net asset value, beginning of year... $17.06 $16.80 $18.00 $17.61 $13.57 Income from investment operations a : Net investment income b,c... 0.17 0.14 0.14 0.23 0.11 Net realized and unrealized gains (losses)... 3.23 1.07 (0.32) 0.91 4.09 Total from investment operations... 3.40 1.21 (0.18) 1.14 4.20 Less distributions from: Net investment income and short term gains received from UnderlyingFunds... (0.18) (0.17) (0.16) (0.29) (0.16) Netrealizedgains... (0.60) (0.78) (0.86) (0.46) Totaldistributions... (0.78) (0.95) (1.02) (0.75) (0.16) Net asset value, end of year.... $19.68 $17.06 $16.80 $18.00 $17.61 Total return d... 20.07% 7.64% (1.20)% 6.48% 31.01% Ratios to average net assets Expenses e... 0.47% f 0.45% f 0.47% f 0.48% f 0.44% Net investment income c... 0.90% 0.83% 0.80% 1.27% 0.68% Supplemental data Net assets, end of year (000 s).... $579,707 $507,530 $523,540 $558,862 $558,124 Portfolio turnover rate... 0.71% 0.40% 0.53% 5.77% 5.90% athe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund. b Based on average daily shares outstanding. c Recognition of net investment income by the Fund is affected by the timing of declaration of dividends by the Underlying Funds in which the Fund invests. dtotal return does not reflect sales commissions or contingent deferred sales charges, if applicable. e Does not include expenses of the Underlying Funds in which the Fund invests. The weighted average indirect expenses of the Underlying Funds was 0.58% for the year ended December 31, 2017. f Benefit of waiver and payments by affiliates rounds to less than 0.01%. 16 Annual Report The accompanying notes are an integral part of these financial statements. franklintempleton.com

FINANCIAL HIGHLIGHTS Franklin Corefolio (continued) Year Ended December 31, 2017 2016 2015 2014 2013 Class C Per share operating performance (for a share outstanding throughout the year) Net asset value, beginning of year... $16.85 $16.61 $17.81 $17.44 $13.45 Income from investment operations a : Net investment income (loss) b,c... 0.02 0.01 0.02 0.10 ( ) d Net realized and unrealized gains (losses)... 3.19 1.05 (0.33) 0.89 4.04 Total from investment operations... 3.21 1.06 (0.31) 0.99 4.04 Less distributions from: Net investment income and short term gains received from UnderlyingFunds... (0.03) (0.04) (0.03) (0.16) (0.05) Netrealizedgains... (0.60) (0.78) (0.86) (0.46) Totaldistributions... (0.63) (0.82) (0.89) (0.62) (0.05) Net asset value, end of year.... $19.43 $16.85 $16.61 $17.81 $17.44 Total return e... 19.20% 6.82% (1.92)% 5.69% 30.09% Ratios to average net assets Expenses f... 1.22% g 1.20% g 1.19% g 1.19% g 1.15% Net investment income (loss) c... 0.15% 0.08% 0.08% 0.56% (0.03)% Supplemental data Net assets, end of year (000 s).... $170,218 $160,729 $172,116 $176,680 $176,332 Portfolio turnover rate... 0.71% 0.40% 0.53% 5.77% 5.90% athe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund. bbased on average daily shares outstanding. c Recognition of net investment income by the Fund is affected by the timing of declaration of dividends by the Underlying Funds in which the Fund invests. d Amount rounds to less than $0.01 per share. etotal return does not reflect sales commissions or contingent deferred sales charges, if applicable. f Does not include expenses of the Underlying Funds in which the Fund invests. The weighted average indirect expenses of the Underlying Funds was 0.58% for the year ended December 31, 2017. g Benefit of waiver and payments by affiliates rounds to less than 0.01%. franklintempleton.com The accompanying notes are an integral part of these financial statements. Annual Report 17

FINANCIAL HIGHLIGHTS Franklin Corefolio (continued) Year Ended December 31, 2017 2016 2015 2014 2013 Class R Per share operating performance (for a share outstanding throughout the year) Net asset value, beginning of year... $17.06 $16.81 $18.01 $17.60 $13.56 Income from investment operations a : Net investment income b,c... 0.12 0.10 0.10 0.16 0.06 Net realized and unrealized gains (losses)... 3.23 1.06 (0.32) 0.95 4.11 Total from investment operations... 3.35 1.16 (0.22) 1.11 4.17 Less distributions from: Net investment income and short term gains received from UnderlyingFunds... (0.13) (0.13) (0.12) (0.24) (0.13) Netrealizedgains... (0.60) (0.78) (0.86) (0.46) Totaldistributions... (0.73) (0.91) (0.98) (0.70) (0.13) Net asset value, end of year.... $19.68 $17.06 $16.81 $18.01 $17.60 Totalreturn... 19.79% 7.33% (1.43)% 6.30% 30.76% Ratios to average net assets Expenses d... 0.72% e 0.70% e 0.69% e 0.69% e 0.65% Net investment income c... 0.65% 0.58% 0.58% 1.06% 0.47% Supplemental data Net assets, end of year (000 s).... $1,629 $1,461 $1,423 $1,545 $1,903 Portfolio turnover rate... 0.71% 0.40% 0.53% 5.77% 5.90% athe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund. b Based on average daily shares outstanding. crecognition of net investment income by the Fund is affected by the timing of declaration of dividends by the Underlying Funds in which the Fund invests. d Does not include expenses of the Underlying Funds in which the Fund invests. The weighted average indirect expenses of the Underlying Funds was 0.58% for the year ended December 31, 2017. e Benefit of waiver and payments by affiliates rounds to less than 0.01%. 18 Annual Report The accompanying notes are an integral part of these financial statements. franklintempleton.com

FINANCIAL HIGHLIGHTS Franklin Corefolio (continued) Year Ended December 31, 2017 a Class R6 Per share operating performance (for a share outstanding throughout the year) Net asset value, beginning of year... $19.18 Income from investment operations b : Net investment income c,d... 0.26 Net realized and unrealized gains (losses)... 0.73 Total from investment operations... 0.99 Less distributions from: Net investment income... (0.25) Netrealizedgains... (0.25) Totaldistributions... (0.50) Net asset value, end of year.... $19.67 Total return e... 5.28% Ratios to average net assets f Expenses before waiver and payments by affiliates g... 3.47% Expenses net of waiver and payments by affiliates g... 0.08% Net investment income d... 1.29% Supplemental data Net assets, end of year (000 s).... $5 Portfolio turnover rate... 0.71% afor the period August 1, 2017 (effective date) to December 31, 2017. bthe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund. c Based on average daily shares outstanding. d Recognition of net investment income by the Fund is affected by the timing of declaration of dividends by the Underlying Funds in which the Fund invests. etotal return is not annualized for periods less than one year. f Ratios are annualized for periods less than one year. gdoes not include expenses of the Underlying Funds in which the Fund invests. The weighted average indirect expenses of the Underlying Funds was 0.58% for the year ended December 31, 2017. franklintempleton.com The accompanying notes are an integral part of these financial statements. Annual Report 19

FINANCIAL HIGHLIGHTS Franklin Corefolio (continued) Year Ended December 31, 2017 2016 2015 2014 2013 Advisor Class Per share operating performance (for a share outstanding throughout the year) Net asset value, beginning of year... $17.08 $16.82 $18.03 $17.64 $13.59 Income from investment operations a : Net investment income b,c... 0.25 0.21 0.21 0.32 0.18 Net realized and unrealized gains (losses)... 3.21 1.04 (0.35) 0.88 4.08 Total from investment operations... 3.46 1.25 (0.14) 1.20 4.26 Less distributions from: Net investment income and short term gains received from UnderlyingFunds... (0.23) (0.21) (0.21) (0.35) (0.21) Netrealizedgains... (0.60) (0.78) (0.86) (0.46) Totaldistributions... (0.83) (0.99) (1.07) (0.81) (0.21) Net asset value, end of year.... $19.71 $17.08 $16.82 $18.03 $17.64 Totalreturn... 20.40% 7.90% (0.96)% 6.79% 31.38% Ratios to average net assets Expenses d... 0.22% e 0.20% e 0.19% e 0.19% e 0.15% Net investment income c... 1.15% 1.08% 1.08% 1.56% 0.97% Supplemental data Net assets, end of year (000 s).... $33,607 $22,721 $19,396 $18,918 $15,495 Portfolio turnover rate... 0.71% 0.40% 0.53% 5.77% 5.90% athe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund. b Based on average daily shares outstanding. crecognition of net investment income by the Fund is affected by the timing of declaration of dividends by the Underlying Funds in which the Fund invests. d Does not include expenses of the Underlying Funds in which the Fund invests. The weighted average indirect expenses of the Underlying Funds was 0.58% for the year ended December 31, 2017. e Benefit of waiver and payments by affiliates rounds to less than 0.01%. 20 Annual Report The accompanying notes are an integral part of these financial statements. franklintempleton.com

Statement of Investments, December 31, 2017 Franklin Corefolio Shares Investments in Underlying Funds 100.1% Domestic Equity 75.0% afranklingrowthfund,classr6... 2,103,909 $198,903,592 a,b Franklin Growth Opportunities Fund, Class R6... 5,018,837 196,888,988 afranklin Mutual Shares Fund, Class R6... 6,736,303 192,725,624 588,518,204 Foreign Equity 25.1% atempletongrowthfundinc.,classr6... 7,249,681 197,336,318 Total Investments in Underlying Funds before Short Term Investments (Cost $531,548,661)... 785,854,522 Value Short Term Investments (Cost $79) 0.0% Money Market Funds 0.0% a,c InstitutionalFiduciaryTrustMoneyMarketPortfolio,0.89%... 79 79 Total Investments in Underlying Funds (Cost $531,548,740) 100.1%... 785,854,601 Other Assets, less Liabilities (0.1)%... (688,257) Net Assets 100.0%... $785,166,344 Rounds to less than 0.1% of net assets. asee Note 3(e) regarding investments in Underlying Funds. bnon-income producing. c The rate shown is the annualized seven-day yield at period end. franklintempleton.com The accompanying notes are an integral part of these financial statements. Annual Report 21

Financial Highlights Franklin Founding Funds Year Ended December 31, 2017 2016 2015 2014 2013 Class A Per share operating performance (for a share outstanding throughout the year) Net asset value, beginning of year... $13.47 $12.14 $13.31 $13.37 $11.14 Income from investment operations a : Net investment income b,c... 0.40 0.36 0.35 0.46 0.32 Net realized and unrealized gains (losses)... 1.10 1.26 (1.16) (0.06) 2.29 Total from investment operations... 1.50 1.62 (0.81) 0.40 2.61 Less distributions from net investment income... (0.43) (0.29) (0.36) (0.46) (0.38) Net asset value, end of year.... $14.54 $13.47 $12.14 $13.31 $13.37 Total return d... 11.20% 13.52% (6.18)% 2.92% 23.64% Ratios to average net assets Expenses e... 0.43% f 0.42% f 0.41% f 0.41% f 0.39% Net investment income c... 2.81% 2.87% 2.65% 3.35% 2.63% Supplemental data Net assets, end of year (000 s).... $3,300,005 $3,310,397 $3,346,192 $3,958,706 $4,170,045 Portfolio turnover rate... 0.48% 0.06% % 3.79% 3.04% athe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund. b Based on average daily shares outstanding. c Recognition of net investment income by the Fund is affected by the timing of declaration of dividends by the Underlying Funds in which the Fund invests. dtotal return does not reflect sales commissions or contingent deferred sales charges, if applicable. e Does not include expenses of the Underlying Funds in which the Fund invests. The weighted average indirect expenses of the Underlying Funds was 0.58% for the year ended December 31, 2017. f Benefit of waiver and payments by affiliates rounds to less than 0.01%. 22 Annual Report The accompanying notes are an integral part of these financial statements. franklintempleton.com

FINANCIAL HIGHLIGHTS Franklin Founding Funds (continued) Year Ended December 31, 2017 2016 2015 2014 2013 Class C Per share operating performance (for a share outstanding throughout the year) Net asset value, beginning of year... $13.27 $11.96 $13.11 $13.18 $10.99 Income from investment operations a : Net investment income b,c... 0.28 0.26 0.25 0.35 0.23 Net realized and unrealized gains (losses)... 1.10 1.25 (1.14) (0.07) 2.25 Total from investment operations... 1.38 1.51 (0.89) 0.28 2.48 Less distributions from net investment income... (0.32) (0.20) (0.26) (0.35) (0.29) Net asset value, end of year.... $14.33 $13.27 $11.96 $13.11 $13.18 Total return d... 10.43% 12.71% (6.85)% 2.12% 22.69% Ratios to average net assets Expenses e... 1.18% f 1.17% f 1.16% f 1.16% f 1.14% Net investment income c... 2.06% 2.12% 1.90% 2.60% 1.88% Supplemental data Net assets, end of year (000 s).... $1,261,997 $1,402,623 $1,458,281 $1,745,766 $1,829,111 Portfolio turnover rate... 0.48% 0.06% % 3.79% 3.04% athe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund. b Based on average daily shares outstanding. c Recognition of net investment income by the Fund is affected by the timing of declaration of dividends by the Underlying Funds in which the Fund invests. dtotal return does not reflect sales commissions or contingent deferred sales charges, if applicable. e Does not include expenses of the Underlying Funds in which the Fund invests. The weighted average indirect expenses of the Underlying Funds was 0.58% for the year ended December 31, 2017. f Benefit of waiver and payments by affiliates rounds to less than 0.01%. franklintempleton.com The accompanying notes are an integral part of these financial statements. Annual Report 23

FINANCIAL HIGHLIGHTS Franklin Founding Funds (continued) Year Ended December 31, 2017 2016 2015 2014 2013 Class R Per share operating performance (for a share outstanding throughout the year) Net asset value, beginning of year... $13.49 $12.16 $13.33 $13.39 $11.16 Income from investment operations a : Net investment income b,c... 0.34 0.33 0.32 0.44 0.29 Net realized and unrealized gains (losses)... 1.13 1.26 (1.16) (0.08) 2.29 Total from investment operations... 1.47 1.59 (0.84) 0.36 2.58 Less distributions from net investment income... (0.38) (0.26) (0.33) (0.42) (0.35) Net asset value, end of year.... $14.58 $13.49 $12.16 $13.33 $13.39 Totalreturn... 10.97% 13.22% (6.40)% 2.68% 23.28% Ratios to average net assets Expenses d... 0.68% e 0.67% e 0.66% e 0.66% e 0.64% Net investment income c... 2.56% 2.62% 2.40% 3.10% 2.38% Supplemental data Net assets, end of year (000 s).... $7,843 $10,776 $10,724 $11,619 $10,597 Portfolio turnover rate... 0.48% 0.06% % 3.79% 3.04% athe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund. b Based on average daily shares outstanding. crecognition of net investment income by the Fund is affected by the timing of declaration of dividends by the Underlying Funds in which the Fund invests. d Does not include expenses of the Underlying Funds in which the Fund invests. The weighted average indirect expenses of the Underlying Funds was 0.58% for the year ended December 31, 2017. e Benefit of waiver and payments by affiliates rounds to less than 0.01%. 24 Annual Report The accompanying notes are an integral part of these financial statements. franklintempleton.com