Noncontrolling interest

6 Months Ended

Jun. 25, 2022

European Wax Center, Inc. and Subsidiaries

Noncontrolling interest

13. Noncontrolling interest

We are the sole managing member of EWC Ventures and, as a result of this control, and because we have a substantial financial interest in EWC Ventures, we consolidate the financial results of EWC Ventures. We report noncontrolling interests representing the economic interests in EWC Ventures held by the other members of EWC Ventures. Income or loss is attributed to the noncontrolling interests based on their contractual distribution rights, and the relative percentages of EWC Ventures Units by us and the other holders of EWC Ventures Units during the period.

The EWC Ventures LLC Agreement permits the members of EWC Ventures to exchange EWC Ventures Units, together with related shares of our Class B common stock, for shares of our Class A common stock on a one-for-one basis or, at the election of the Company, for cash at the current fair value on the date of the exchange. Changes in the Company’s ownership interest in EWC Ventures while

retaining control of EWC Ventures will be accounted for as equity transactions. As such, future redemptions or direct exchanges of EWC Ventures Units by the other members will result in a change in ownership and reduce the amount recorded as noncontrolling interest and increase additional paid-in capital. Additionally, certain members of EWC Ventures hold unvested EWC Ventures Units that are subject to service, performance, and/or market conditions. The vesting of EWC Ventures units will result in a change in ownership and increase the amount recorded as noncontrolling interest and decrease additional paid-in capital.

The following table summarizes the ownership of EWC Ventures as of June 25, 2022:

	June 25, 2022
	Units Owned		Ownership Percentage
European Wax Center, Inc.		39,503,811		63.5	%
Noncontrolling interest		22,658,035		36.5	%
Total		62,161,846		100.0	%

The following table presents the effect of changes in the Company’s ownership interest in EWC Ventures on the Company’s equity for the periods indicated:

	13 Weeks Ended June 25, 2022		26 Weeks Ended June 25, 2022
Net income attributable to European Wax Center, Inc.	$	968	$	2,853
Transfers from noncontrolling interests:
Increase in additional-paid-in-capital as a result of equity allocations to the noncontrolling interest		4,095		2,946
Net increase in equity of European Wax Center, Inc. due to equity interest transactions with noncontrolling interests	$	5,063	$	5,799