If a Focalpoint Coaching franchisee is an entity, how is a controlling ownership interest determined?
Focalpoint_Coaching Franchise · 2025 FDDAnswer from 2025 FDD Document
References to a "controlling ownership interest" in Franchisee or one of Franchisee's owners (if an Entity) mean the percent of the voting shares or other voting rights that results from dividing one hundred percent (100%) of the ownership interests by the number of owners. In the case of a proposed transfer of an ownership interest in Franchisee or one of Franchisee's owners, the determination of whether a "controlling ownership interest" is involved must be made as of both immediately before and immediately after the proposed transfer to see if a "controlling ownership interest" will be transferred (because of the number of owners before the proposed transfer) or will be deemed to have been transferred (because of the number of owners after the proposed transfer).
Source: Item 22 — Contracts (FDD pages 56–57)
What This Means (2025 FDD)
According to Focalpoint Coaching's 2025 Franchise Disclosure Document, a controlling ownership interest in a franchisee entity is determined by dividing 100% of the ownership interests by the number of owners. The resulting percentage of voting shares or other voting rights determines whether an owner has a controlling interest.
This calculation is relevant when considering a transfer of ownership. The determination of whether a controlling ownership interest is involved must be made both immediately before and immediately after the proposed transfer. This ensures that the transfer does not inadvertently result in a change of control, either because of the number of owners before the transfer or the number of owners after the transfer.
For a prospective Focalpoint Coaching franchisee, this means that any transfer of ownership within their business entity must be carefully evaluated to ensure compliance with Focalpoint Coaching's franchise agreement. It's essential to understand how the number of owners impacts the percentage of ownership required to maintain or transfer control. This is particularly important if the franchisee plans to bring in partners or investors, or if ownership changes are anticipated in the future.