Does the Brueggers Bagels agreement create a trust or fiduciary relationship regarding the SMF?
Brueggers_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
- 14.4.4. Nothing in this Agreement will be construed to create a trust or fiduciary relationship of any kind or nature whatsoever among the parties as it relates to the SMF or our actions with respect thereto, including, but not limited to, collection of payments, maintenance of the bank account, bookkeeping, and disbursement of monies from the SMF.
Except as expressly provided in this Section 14, we assume no direct or indirect liability or obligation to you with respect to maintenance, direction, or administration of the SMF.
Source: Item 22 — CONTRACTS (FDD page 61)
What This Means (2025 FDD)
According to Brueggers Bagels's 2025 Franchise Disclosure Document, the franchise agreement explicitly states that it does not establish a trust or fiduciary relationship between the parties concerning the System Marketing Fund (SMF). This means that Brueggers Bagels is not legally obligated to act in the best financial interests of the franchisees when managing the SMF.
This disclaimer extends to all actions related to the SMF, including collecting payments, maintaining the bank account, bookkeeping, and disbursing funds. Brueggers Bagels assumes no direct or indirect liability or obligation to franchisees regarding the maintenance, direction, or administration of the SMF, except as expressly provided in the franchise agreement.
For a prospective Brueggers Bagels franchisee, this is a crucial point to consider. While franchisees are required to contribute to the SMF, they do not have the legal protections of a trust or fiduciary relationship. Therefore, it is essential to carefully evaluate how Brueggers Bagels manages and utilizes the SMF, as well as to understand the potential risks involved. Franchisees should seek clarification on the SMF's governance and oversight mechanisms to ensure transparency and accountability.