What was the amount of 'profits interest units compensation' for Black Bear Diner in 2023?
Black_Bear_Diner Franchise · 2025 FDDAnswer from 2025 FDD Document
| Balance, December 30, 2021 | $ 67,537,110 | $ (20,196,680) | $ 47,340,430 |
|---|---|---|---|
| Profits interest units compensation | 69,000 | - | 69,000 |
| Net income | - | 6,486,430 | 6,486,430 |
| - | (13,529,000) | (13,529,000) | |
| Distributions, net | |||
| Balance, December 28, 2022 | 67,606,110 | (27,239,250) | 40,366,860 |
| Profits interest units compensation | 50,000 | - | 50,000 |
| Net income | - | 6,833,879 | 6,833,879 |
| - | (7,965,000) | (7,965,000) | |
| Distributions, net | |||
| Balance, December 27, 2023 | $ 67,656,110 | $ (28,370,371) | $ 39,285,739 |
Source: Item 23 — RECEIPT (FDD pages 56–243)
What This Means (2025 FDD)
According to the 2025 Black Bear Diner Franchise Disclosure Document, the profits interest units compensation for the period ending December 27, 2023, was $50,000. This figure reflects the compensation related to profit interest units within the company's financial structure. This compensation is part of the broader member's equity and profits interest units, which also includes net income and distributions.
The profits interest units are performance-vested and remain unvested until a liquidity event, such as a sale of the company or an IPO, and are forfeited upon termination of employment. These units allow holders to share in the residual return after preferred and common unit holders receive distributions equal to their original investment. The distribution threshold for newly issued profit interest units is adjusted each year.
Additionally, the profit interest unit holders are eligible to receive tax distributions from the company, though no such distributions were made during the years ended December 27, 2023, and December 28, 2022, related to profit interests held. As of December 27, 2023, the maximum profits interest units that may be issued is limited to 6,124,677. The company had approximately $69,000 of unrecognized compensation expense attributable to the time-based vesting units, which will be recognized over the weighted average remaining vesting period of approximately 1.6 years.