What information must be included in the notice to Brueggers Bagels regarding equity transfers to employees?
Brueggers_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
If Franchisee is a business entity, your owner or owners may, without our prior written consent, sell, assign, transfer or give away to employees of Franchisee an aggregated amount of not more than twenty percent (20%) of Franchisee's outstanding equity, including the equity interest granted to the Operating Partner as required under Section 6 above provided: (i) we receive written notice of each transfer at least thirty (30) days before the transfer, which notice must identify the transferee, describe the transferee's position of employment, and include a calculation demonstrating that the planned transfer complies with this Section 8.3; and (ii) the transfer, when combined with all prior transfers of equity in Franchisee, does not result in a transfer of more than twenty percent (20%) of the outstanding equity or in a change of control of Franchisee.
Source: Item 22 — CONTRACTS (FDD page 61)
What This Means (2025 FDD)
According to Brueggers Bagels' 2025 Franchise Disclosure Document, if a franchisee is a business entity, the owner(s) may sell, assign, transfer, or give away up to 20% of the outstanding equity to employees without prior written consent from Brueggers Bagels. This includes equity interest granted to the Operating Partner.
However, Brueggers Bagels requires written notice of each transfer at least 30 days before it occurs. This notice must include the identity of the employee receiving the equity, a description of their position of employment, and a calculation demonstrating that the planned transfer complies with the 20% limit.
Furthermore, the transfer, when combined with all prior transfers of equity, must not exceed 20% of the outstanding equity or result in a change of control of the franchisee. This provision allows franchisees some flexibility in incentivizing employees with equity while ensuring Brueggers Bagels maintains oversight and control over significant ownership changes.