Cosi Inc. chief executive RJ Dourney will sell his Cosi franchise, Hearthstone Associates LLC, to the fast-casual restaurant chain at the end of this month.
Boston-based Cosi disclosed the pending deal in a filing with the Securities and Exchange Commission last week. Cosi agreed to the terms last March when Dourney was hired to run the chain, giving him the option to sell his franchise as part of an employment agreement. Hearthstone was Cosi’s largest franchisee at the time, with 13 locations.
Cosi moved its headquarters to Boston from Illinois after Dourney, a Massachusetts resident, became the chief executive.
When the deal is completed Jan. 31, Cosi will issue nearly 1.8 million shares to Dourney as payment for Hearthstone. Cosi shares closed at $2.34 on Friday, valuing Hearthstone at $4.2 million. When Dourney was hired to be chief executive, Cosi shares were trading at around $1 a share.