Does the Brueggers Bagels agreement allow for any exceptions to the non-compete clause after the expiration or termination of the License Agreement?
Brueggers_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
For a period of one (1) year after the expiration or termination of the Franchise Agreement or the approved transfer of the Bakery to a new owner, you will not directly or indirectly own, maintain, operate, engage in, be employed by, provide assistance to, or have any interest in any Competing Business which is, or is intended to be, located within ten (10) miles of the Premises or within five (5) miles of any other Bruegger's Bakery, except for any business operated pursuant to a valid franchise agreement or license agreement with us or one of our affiliates, or as we otherwise approve in writing. If you fail or refuse to abide by any of the foregoing restrictions and BFC obtains enforcement in a judicial or arbitration proceeding, the obligations under the breached restriction will continue in effect for one (1) year after the date you begin to comply with the order enforcing the restriction.
Source: Item 22 — CONTRACTS (FDD page 61)
What This Means (2025 FDD)
According to the 2025 Brueggers Bagels Franchise Disclosure Document, there are limited exceptions to the non-compete clause after the expiration or termination of the Franchise Agreement. Specifically, for one year after the agreement ends or the bakery is transferred to a new owner, a franchisee cannot be involved in a competing business within ten miles of the Brueggers Bagels location or within five miles of any other Brueggers Bagels restaurant.
However, this restriction does not apply if the competing business is operated under a valid franchise or license agreement with Brueggers Bagels or its affiliates, or if Brueggers Bagels provides written approval. This means a former franchisee could potentially operate a competing business within the restricted area if they obtain permission from Brueggers Bagels or operate under another Brueggers Bagels franchise agreement.
It's important to note that if a franchisee violates the non-compete clause and Brueggers Bagels pursues legal action, the restriction remains in effect for one year after the franchisee complies with the court or arbitration order. This ensures Brueggers Bagels can enforce the non-compete agreement and protect its business interests, even if a franchisee initially resists compliance. This is a fairly standard non-compete clause in franchising, designed to protect the brand's market share and confidential information.