During the Brueggers Bagels agreement term, am I prohibited from diverting business to a Competing Business?
Brueggers_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
19. RESTRICTIONS ON COMPETITION
- 19.1. During the Agreement Term. You specifically acknowledge that you will receive valuable, specialized training from us and access to confidential information regarding our operational, sales, promotional, and marketing methods and techniques of the System. You agree that, during the Agreement Term, except as we otherwise approve in writing, you will not, either directly or indirectly, for yourself or through, on behalf of, or in conjunction with any person or legal entity:
- 19.1.1. Own, maintain, operate, engage in, be employed by, provide any assistance to, or have any interest in any Competing Business, as defined below. "Competing Business" means a retail business that sells or offers bagels, cream cheese, and/or coffee products that separately or in the aggregate constitute or would constitute thirty percent (30%) or more of that business' gross revenues at any one or more retail location(s), but does not include any business that you operate under a valid franchise agreement or license agreement with us or one of our affiliates; or
- 19.1.2. Divert or attempt to divert any present or prospective business or customer to any Competing Business by direct or indirect inducement or otherwise, or do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Proprietary Marks and the System.
- 19.2. After Expiration, Termination, or Transfer. You agree that, except pursuant to other Franchise Agreements with us or our affiliates, or as we otherwise approve in writing, you will not, for one (1) year after the expiration or termination of this Agreement or the approved transfer of this Agreement to a new franchisee, either directly or indirectly, for yourself or through, on behalf of, or in conjunction with any person or legal entity, 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 Bakery.
Source: Item 22 — CONTRACTS (FDD page 61)
What This Means (2025 FDD)
According to Brueggers Bagels's 2025 Franchise Disclosure Document, during the agreement term, franchisees are prohibited from diverting business to a competing business. Specifically, franchisees cannot divert or attempt to divert any present or prospective business or customer to any Competing Business by direct or indirect inducement or otherwise. They also cannot perform any other act that is injurious or prejudicial to the goodwill associated with Brueggers Bagels's Proprietary Marks and the System. This restriction is in place unless Brueggers Bagels provides written approval otherwise.
A "Competing Business" is defined as a retail business that sells or offers bagels, cream cheese, and/or coffee products that separately or in the aggregate constitute or would constitute thirty percent (30%) or more of that business' gross revenues at any one or more retail location(s). However, this definition does not include any business that you operate under a valid franchise agreement or license agreement with Brueggers Bagels or one of its affiliates.
This non-diversion clause is a standard provision in franchise agreements. It protects Brueggers Bagels's market share, customer base, and brand reputation by preventing franchisees from using their knowledge and resources gained from the franchise to benefit a competing business. Franchisees should be aware of this restriction and ensure they do not engage in any activities that could be construed as diverting business away from Brueggers Bagels.