Regarding Brueggers Bagels, what is the definition of 'Controlling Interest' as it pertains to a person or entity?

According to the 2025 Brueggers Bagels Franchise Disclosure Document, a 'Controlling Interest' is defined in relation to a person or entity, referring to any other person or entity that either controls, is controlled by, or is under common control with that person. The term 'Control' itself is further defined as the ability to direct the policies and operations of a person or entity.

For a prospective Brueggers Bagels franchisee, this definition is important because it clarifies the scope of certain obligations and representations within the License Agreement. For instance, the Licensee must consider the sales of any subsidiaries in which they own a Controlling Interest when determining if their aggregate sales from licensed Brueggers Bagels businesses will exceed 20% of their total revenues. This is relevant to exemptions under the FTC Franchise Rule.

This definition ensures that Brueggers Bagels can assess the franchisee's overall financial picture and business activities to determine if they qualify for certain exemptions or if there are potential conflicts of interest. It also affects the franchisee's obligations regarding sales and potential business sales within a year of commencement, ensuring that the Brueggers Bagels business remains a significant part of their overall business portfolio. The definition of 'Controlling Interest' is a standard legal term, but its specific application within the Brueggers Bagels franchise agreement is crucial for compliance and understanding the franchisee's responsibilities.