CLASS A DISTRIBUTION PLAN

     WHEREAS, Templeton Smaller Companies Growth Fund (the "Fund") is registered
as an open-end  diversified  management  investment company under the Investment
Company Act of 1940 (the "1940 Act"); and

     WHEREAS, the Fund and Franklin Templeton  Distributors,  Inc. (the "Selling
Company"),  a  wholly  owned  subsidiary  of  Franklin  Resources,  Inc.  and  a
broker-dealer registered under the Securities Exchange Act of 1934, have entered
into a Distribution  Agreement pursuant to which the Selling Company will act as
principal underwriter of Shares of the Fund for sale to the public; and

     WHEREAS, shares of beneficial interest of the Fund are divided into classes
of shares, one of which is designated Class A; and

     WHEREAS,  the Board of Directors or Trustees of the Fund (the  "Board") has
determined to adopt this Distribution Plan (the "Plan"),  in accordance with the
requirements  of the  1940 Act and has  determined  that  there is a  reasonable
likelihood  that the Plan  will  benefit  the  Fund and the  holders  of Class A
Shares.

     NOW THEREFORE,  the Fund hereby adopts, with respect to its Class A Shares,
the Plan on the following terms and conditions:

     1. The Fund will  reimburse  the  Selling  Company  for costs and  expenses
incurred in connection with the distribution and marketing of the Class A Shares
of the Fund. Such distribution  costs and expenses may include:  (a) payments to
broker-dealers  who  provide  certain  services  of value to the Fund's  Class A
Shareholders  (sometimes  referred to as a "trail fee");  (b)  reimbursement  of
expenses  relating  to  selling  and  servicing  efforts  or of  organizing  and
conducting  sales  seminars;  (c) payments to employees or agents of the Selling
Company who engage in or support distribution of the Class A Shares; (d) payment
of the costs of preparing, printing and distributing prospectuses and reports to
prospective investors and of printing and advertising  expenses;  (e) payment of
dealer  commissions and wholesaler  compensation in connection with sales of the
Fund's Class A Shares  exceeding $1 million (for which the Fund imposes no sales
charge) and interest or carrying charges in connection  therewith;  and (f) such
other  similar  services  as  the  Fund's  Board  determines  to  be  reasonably
calculated to result in the sale of Class A Shares.

     The Selling Company will be reimbursed for such costs, expenses or payments
on a quarterly basis, subject to a limit of 0.25% per annum of the average daily
net assets of the Fund's Class A Shares. Payments made out of or charged against
the assets of the Class A Shares of the Fund must be in reimbursement  for costs
and  expenses in  connection  with any activity  which is primarily  intended to
result in the sale of the  Fund's  Class A Shares.  The costs and  expenses  not
reimbursed in any one given quarter (including costs and expenses not reimbursed
because  they  exceeded  the limit of 0.25% per annum of the  average  daily net
assets of the Fund's Class A Shares) may be reimbursed in subsequent quarters or
years.

     2. The Plan shall not take effect with respect to the Fund's Class A Shares
until it has been  approved by a vote of at least a majority  (as defined in the
1940  Act) of the  outstanding  voting  securities  of the Class A Shares of the
Fund.  With respect to the submission of the Plan for such a vote, it shall have
been  effectively  approved  with  respect  to the  Fund's  Class A Shares  if a
majority of the outstanding  voting securities of the Class A Shares of the Fund
votes for approval of the Plan.


     3. The Plan shall not take effect until it has been approved, together with
any related  agreements and supplements,  by votes of a majority of both (a) the
Board of Directors or Trustees of the Fund, and (b) those Fund Board members who
are not "interested  persons" (as defined in the 1940 Act) and have no direct or
indirect  financial  interest  in the  operation  of the Plan or any  agreements
related to it (the "non-interested Board members""), cast in person at a meeting
(or  meetings)  called for the  purpose  of voting on the Plan and such  related
agreements.


     4. The  Plan  shall  continue  in  effect  so long as such  continuance  is
specifically  approved at least annually in the manner  provided for approval of
the Plan in paragraph 3.


     5. Any  person  authorized  to direct  the  disposition  of monies  paid or
payable by the Class A Shares of the Fund  pursuant  to the Plan or any  related
agreement  shall  provide to the Fund's Board,  and the Board shall  review,  at
least  quarterly,  a written  report of the amounts so expended and the purposes
for which such expenditures were made.

     6. Any agreement related to the Plan shall be in writing and shall provide:
(a) that such  agreement  may be terminated at any time as to the Fund's Class A
Shares,  without  payment  of  any  penalty,  by  vote  of  a  majority  of  the
non-interested  Board members or by vote of a majority of the outstanding voting
securities  of the  Class A Shares of the Fund,  on not more  than  sixty  days'
written notice to any other party to the agreement;  and (b) that such agreement
shall terminate automatically in the event of its assignment.

     7. The Plan may be terminated at any time,  without payment of any penalty,
by vote of a  majority  of the  non-interested  Board  members,  or by vote of a
majority of the outstanding Class A Shares of the Fund.


     8. The Plan may be amended at any time by the Fund's Board , provided  that
(a) any amendment to increase  materially  the costs which the Class A Shares of
the Fund may bear for distribution  pursuant to the Plan shall be effective only
upon approval by a vote of a majority of the Class A Shares of the Fund, and (b)
any material  amendments  of the terms of the Plan shall become  effective  only
upon approval as provided in paragraph 3 hereof.


     9. While the Plan is in  effect,  the  selection  and  nomination  of Board
members  who are not  "interested  persons"  (as defined in the 1940 Act) of the
Fund shall be  committed  to the  discretion  of the Board  members  who are not
interested persons.


     10. The Fund shall preserve  copies of the Plan, any related  agreement and
any report made  pursuant to  paragraph 5 hereof,  for a period of not less than
six years from the date of the Plan,  such agreement or report,  as the case may
be, the first two years of which shall be in an easily accessible place.


     IN WITNESS WHEREOF,  the Fund has executed this  Distribution  Plan on this
1st day of June, 2004.

                       TEMPLETON GLOBAL SMALLER COMPANIES FUND



                       By:/s/MURRAY L. SIMPSON
                          ----------------------------------------
                           Murray L. Simpson
                           Vice President and Assistant Secretary



                       FRANKLIN/TEMPLETON DISTRIBUTORS, INC.


                       By:/s/PETER D. JONES
                          ----------------------------------------
                          Peter D. Jones
                          President