What is the consequence of a 'Specified Event' such as termination for cause, on vested and unvested shares under the Checkersrallys Management Incentive Plan?

According to Checkersrallys's 2025 Franchise Disclosure Document, the Management Incentive Plan details the handling of Class B Units, which are profit-sharing interests. Fifty percent of these units are service-based, vesting annually over five years, while the other half are performance-based, vesting upon a Liquidity Event, such as the sale of Topco. Upon a Liquidity Event, all unvested service-based units become fully vested.

However, the Management Incentive Plan also specifies that certain events, termed 'Specified Events,' will trigger the automatic forfeiture of all shares, whether vested or unvested, without any compensation. One such Specified Event is termination for cause.

For a prospective Checkersrallys franchisee, this means that any Class B Units acquired under the Management Incentive Plan are at risk of complete forfeiture if the franchisee is terminated for cause. This condition applies regardless of whether the shares have already vested or are still subject to vesting requirements. This creates a significant risk, as vested equity, which would normally be considered an asset, can be nullified under these specific circumstances.