According to the Brueggers Bagels FDD, what constitutes a 'Controlling Interest'?

According to the 2025 Brueggers Bagels Franchise Disclosure Document, a 'Controlling Interest' is defined in relation to a person or entity and refers to any other person or entity controlling, controlled by, or under common control with that person. Control, in this context, signifies the ability to direct the policies and operations of a person or entity. This definition is relevant when assessing the franchisee's representations and warranties, particularly concerning their existing business interests and anticipated sales from the Brueggers Bagels franchise.

This definition is important because Brueggers Bagels uses it to assess whether the franchisee qualifies for certain exemptions under federal and state franchise laws. Specifically, the franchisee must warrant that the aggregate sales from the new Brueggers Bagels franchise will not exceed 20% of the total sales of the franchisee and any entities under their 'Controlling Interest.' This ensures that the franchisee has sufficient experience and financial stability, and that the new franchise does not disproportionately impact their overall business.

For a prospective Brueggers Bagels franchisee, understanding this definition is crucial for accurately assessing their eligibility for exemptions and for complying with the terms of the License Agreement. They must carefully consider all entities they control, are controlled by, or are under common control with, to determine if the 20% sales threshold is likely to be exceeded. Failure to accurately assess this could lead to legal or contractual issues with Brueggers Bagels.