What does 'Control' mean in the context of transferring a Brueggers Bagels license?

According to Brueggers Bagels' 2025 Franchise Disclosure Document, 'Control' is defined within Exhibit D to the License Agreement, specifically in the context of FTC Franchise Rule exemptions. The document states that "Control" means the ability to direct the policies and operations of a person or entity. This definition is used to determine what constitutes a 'Controlling Interest' in the licensee, which in turn affects whether the licensee meets certain criteria for exemptions from the FTC Franchise Rule.

For a prospective Brueggers Bagels franchisee, this definition is important because it clarifies the level of influence or authority needed to be considered in control of the business. If a franchisee or related entities have a 'Controlling Interest,' it means they have the power to dictate the business's policies and operations. This determination is relevant to representations and warranties the licensee makes regarding their business experience and sales expectations.

Specifically, the definition of 'Control' is used in conjunction with assessing whether the aggregate sales from the Brueggers Bagels franchise are anticipated to exceed 20% of the licensee entities' total sales. If the franchisee or its related entities, including those under common control, anticipate that the Brueggers Bagels sales will exceed this threshold, they may not qualify for certain exemptions under the FTC Franchise Rule. This could impact the level of disclosure and regulatory oversight required during the franchising process.