What were the distributions reported for Beggars Pizza in 2022?
Beggars_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
ed $10,010 and $9,166, respectively, and are included in accounts payable on the balance sheet.
3. Members' Equity
BPF Holding Corporation wholly owns the Class A Membership interest of Beggars Pizza Franchise, LLC. In accordance with the operating agreement (the "Agreement") of the Company, the Company issued Class B and C member units as profits interest units. Pursuant to the Agreement, Class B units vest only upon the achievement of certain hurdles, and Class C units are immediately vested. As of December 31, 2024 and 2023, Class B units are not vested. For the years ended December 31, 2024 and 2023, there was no compensation expense related to the issuance of the Class B and C units.
Voting rights are allocated to each member class based on the provisions of the Agreement. A general description of the Agreements distribution provisions are as follows:
First, 100 percent to Class A members' pro rata until the cumulative distributions received by the members equals $4,176,000.
Second, 100 percent to the Class B and C members in proportion to their vested percentage until the cumulative distributions received by such members equals $2,435,999.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 39)
What This Means (2025 FDD)
According to Beggars Pizza's 2025 Franchise Disclosure Document, the company's operating agreement outlines specific distribution provisions for its members. The distributions are prioritized among different classes of members (Class A, B, and C) based on cumulative distribution targets and vested percentages.
Specifically, the agreement dictates that the first $4,176,000 of distributions goes to Class A members pro rata. Following this, the next $2,435,999 is allocated to Class B and C members in proportion to their vested percentage. After these initial allocations, any remaining distributions are divided pro rata among all members, with Class A receiving 63.2 percent, Class B receiving 30 percent, and Class C receiving 6.8 percent.
As of December 31, 2022, the Class B units were not vested. This impacts how distributions are allocated, as the vested percentage determines the proportion each class receives after the initial distribution targets are met. A prospective franchisee should inquire about the vesting schedule and current vesting status of each member class to fully understand the distribution dynamics and potential returns.