How many Time-Vesting Units were outstanding as of December 31, 2021, for Benjamin Franklin Plumbing?
Benjamin_Franklin_Plumbing Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 22: CONTRACTS]
| Time-Vesting Units | |||||
|---|---|---|---|---|---|
| Weighted Average Fair Value | Class B Profit Interest Units | Weighted Average Remaining Contractual Term | |||
| Units outstanding as of December 31, 2021 | $ 0.33 | 19,414,168 | 2.57 years | ||
| Granted | 0.02 | 964,876 | |||
| Forfeitures | 0.28 | (964,876) | |||
| Vested due to change of control | 0.32 | (19,414,168) | |||
| Units outstanding as of November 30, 2022 | $ - | - | N/A | ||
| Granted under 2022 plan | 0.30 | 46,865,701 | |||
| Forfeitures | - | - | |||
| Vested | - | - | |||
| Units outstanding as of December 31, 2022 | $ 0.30 | 46,865,701 | 4.92 years | ||
| Granted | 0.31 | 10,920,399 | |||
| Forfeitures | 0.30 | (5,646,550) | |||
| Vested | - | - | |||
| Units outstanding as of December 31, 2023 | $ 0.30 | 52,139,550 | 4.05 years | ||
| Granted | 0.29 | 6,733,301 | |||
| Forfeitures | 0.30 | (7,405,849) | |||
| Vested | - | - | |||
| Units outstanding as of December 31, 2024 | $ 0.30 | 51,467,002 | 3.22 years |
[Item 22: CONTRACTS]
| Performance-Vesting Units | ||||||
|---|---|---|---|---|---|---|
| Weighted Average Fair Value | Class B Profit Interest Units | Weighted Average Remaining Contractual Term | ||||
| Units outstanding as of December 31, 2021 | $ | 0.18 | 38,828,338 | 2.57 years | ||
| Granted | 0.02 | 9,663,251 | ||||
| Forfeitures | 0.15 | (3,618,889) | ||||
| Vested due to change of control | 0.13 | (44,872,700) | ||||
| Units outstanding as of November 30, 2022 | $ | - | - | N/A | ||
| Granted under 2022 plan | 0.22 | 128,858,713 | ||||
| Forfeitures | - | - | ||||
| Vested | - | - | ||||
| Units outstanding as of December 31, 2022 | $ | 0.22 | 128,858,713 | 4.92 years | ||
| Granted | 0.23 | 30,025,978 | ||||
| Forfeitures | 0.22 | (15,525,367) | ||||
| Vested | - | - | ||||
| Units outstanding as of December 31, 2023 | $ | 0.24 | 143,359,324 | 4.05 years | ||
| Granted | 0.27 | 18,513,422 |
The awards that have a time-vesting component are earned in equal tranches upon each of the anniversaries over the period of five years which was determined to be the requisite service period. These awards will not vest until the return on invested capital condition is met or upon occurrence of the change in control events even as the time-vesting condition is met. As of December 31, 2024, 2023 and 2022 no units were vested.
Source: Item 22 — CONTRACTS (FDD pages 87–88)
What This Means (2025 FDD)
According to Benjamin Franklin Plumbing's 2025 Franchise Disclosure Document, there were two types of units outstanding as of December 31, 2021: Time-Vesting Units and Performance-Vesting Units. For Time-Vesting Units, there were 19,414,168 Class B Profit Interest Units outstanding with a weighted average fair value of $0.33. For Performance-Vesting Units, there were 38,828,338 Class B Profit Interest Units outstanding with a weighted average fair value of $0.18.
Time-vesting units are earned over a five-year period, vesting in equal portions on each anniversary. However, these units will not vest until a return on invested capital condition is met or if there is a change in control, even if the time-vesting condition has been satisfied. The document indicates that no units were vested as of December 31, 2022, 2023, and 2024.
For a prospective Benjamin Franklin Plumbing franchisee, understanding the vesting schedule and conditions attached to these units is crucial. The fact that vesting is contingent on both time and financial performance (return on invested capital) means that simply waiting for the five-year period to elapse is not enough to guarantee ownership of the units. The franchisee should inquire about the specific targets for return on invested capital and how likely they are to be met, as this will directly impact the value and potential benefits of these units.