What are variable interest entities (VIEs) as they pertain to Browns Chicken's financial reporting?

In January 2003, the Financial Accounting Standards Board (FASB) issued guidance on consolidating variable interest entities, including the identification of and financial reporting for entities for which control is achieved through means other than voting rights. Such entities are referred to as variable interest entities (VIEs). The members of Brown's Chicken, LLC – Series A are also the members of Brown's Chicken, LLC. ASC 810 requires that a company that holds variable interests in an entity consolidate the entity if the company's interest in the VIE is such that the company will absorb a majority of the VIE's expected losses and/or receive a majority of the VIE's expected residual returns, if they occur. In such cases, the company is the primary beneficiary of the VIE. The issuance of this accounting pronouncement, which interpreted an existing generally accepted accounting principle, caused Brown's Chicken, LLC to consider whether it should continue to issue separate financial statements or whether instead it should include the consolidated financial results of Brown's Chicken, LLC – Series A in its financial statements. Because of the common control and the fact that the Company will absorb a majority of the expected losses and/or receive a majority of the expected residual returns of Brown's Chicken, LLC – Series A, it was concluded that consolidation better presents the financial information.

Source: Item 21 — FINANCIAL STATEMENTS (FDD page 42)