What actions related to insolvency would allow Brueggers Bagels to terminate the agreement?
Brueggers_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
- 10.2. Termination by Licensee. Licensee shall have the right to terminate this Agreement, if any one or more of the following events shall occur:
- (a) Licensor becomes insolvent, or takes the benefit of any present or future insolvency statute, or shall make a general assignment for the benefit of creditors, or file a voluntary petition in bankruptcy or a petition or answer seeking an arrangement for its reorganization, or the readjustment of its indebtedness under the federal bankruptcy laws, or under any other law or statute of the United States or any state thereof, or shall consent to the appointment of a receiver, trustee or liquidator of all or substantially all of its property or shall materially breach the provisions of Section 10.1 hereof;
- (b) A petition under any part of the federal bankruptcy laws, or an action under any present or future insolvency laws or statute, is filed against Licensor and shall not be dismissed within thirty (30) days after the filing thereof;
- (c) Licensor materially fails to keep, perform and observe each and every other promise, covenant and agreement set forth in this Agreement on its part to be kept, performed or observed, and such failure shall continue for a period of more than thirty (30) days after receipt by Licensor of written notice of such breach or default, except where fulfillment of its obligations requires activity over a period of time which in no event shall exceed thirty (30) days and Licensor shall have commenced to perform in a timely and diligent basis whatever may be required for fulfillment of its obligations and continued such performance without interruption, except for Force Majeure events;
- (d) With respect to Section 10.2(a), termination shall be automatic upon the occurrence of the event. With respect to Section 10.2(b), Licensee may terminate upon notice, and with respect to Section 10.2(c), Licensee may terminate after the applicable cure or notice period has expired; or
Source: Item 22 — CONTRACTS (FDD page 61)
What This Means (2025 FDD)
According to the 2025 Brueggers Bagels Franchise Disclosure Document, the licensee (franchisee) has the right to terminate the agreement if the licensor (Brueggers Bagels) becomes insolvent or takes certain actions related to insolvency. Specifically, the franchisee can terminate the agreement if Brueggers Bagels: becomes insolvent, takes the benefit of any present or future insolvency statute, makes a general assignment for the benefit of creditors, or files a voluntary petition in bankruptcy. This also applies if Brueggers Bagels files a petition or answer seeking an arrangement for its reorganization, or the readjustment of its indebtedness under federal bankruptcy laws, or consents to the appointment of a receiver, trustee, or liquidator of all or substantially all of its property. Termination is automatic upon the occurrence of any of these events.
Additionally, the franchisee can terminate the agreement if a petition under any part of the federal bankruptcy laws, or an action under any present or future insolvency laws or statute, is filed against Brueggers Bagels and is not dismissed within thirty (30) days after the filing. In this case, the franchisee may terminate upon notice.
These provisions protect the franchisee in the event of severe financial distress or failure on the part of Brueggers Bagels. It allows the franchisee to end the agreement if Brueggers Bagels is unable to meet its financial obligations or is undergoing significant financial restructuring, which could impact the support and resources available to the franchisee. This is a fairly standard protection in franchise agreements, ensuring that franchisees are not unduly burdened by the franchisor's financial instability.