What was the purpose of the BossCo Holdings, Inc. 2017 Management Incentive Plan, in which Checkersrallys employees participated?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
Company employees participated in the BossCo Holdings, Inc. 2017 Management Incentive Plan, which is administered by BossCo Holdings. The 2017 Management Incentive Plan was created to attract and retain the best available employees and non-employee directors to serve in the Company's management. The Plan provides for the granting of Options, Restricted Stock, Restricted Stock Units and Unrestricted Stock and was amended and restated February 25, 2021.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, the BossCo Holdings, Inc. 2017 Management Incentive Plan was designed to attract and retain high-quality employees and non-employee directors for the company's management team. The plan was administered by BossCo Holdings. It allowed for the granting of various incentives, including Options, Restricted Stock, Restricted Stock Units, and Unrestricted Stock. The plan was later amended and restated on February 25, 2021.
For a prospective Checkersrallys franchisee, understanding the details of management incentive plans is less directly relevant than understanding the franchise agreement or financial performance representations. However, it provides insight into how Checkersrallys incentivizes its corporate employees, which can indirectly affect the support and services a franchisee receives. A well-motivated management team at the corporate level is more likely to provide effective support to franchisees.
The FDD mentions that the pretax stock-based compensation cost recognized under the Amended and Restated 2017 Management Incentive Plan was $5.7 million for the period January 3, 2023 through June 16, 2023. This figure indicates the scale of investment Checkersrallys made in incentivizing its management team through equity-based compensation. The Out-of-Court Restructuring resulted in a change in control, per the 2017 Management Incentive Plan, which led to the vesting of all outstanding service-based and performance-based awards. As part of the $5.7 million, $5.3 million was recognized due to this accelerated vesting.
It is important to note that on August 25, 2023, Topco created a new management incentive plan called "Management Incentive Plan," which authorized Topco to issue various equity awards to managers and executives of Topco and its consolidated subsidiaries. These awards include Class B units, phantom units, options, warrants, and other securities convertible into Class B units of Topco. For the period ended January 1, 2024, the only awards issued were for Class B Units, which are profit-sharing interests that participate in earnings upon reaching a contractual hurdle rate.