How does Brueggers Bagels allocate the Marketing Contribution?
Brueggers_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
nate the Development Agreement, and by cross-default, any other Franchise Agreements.
Advertising
Under the Franchise Agreement, you have a required weekly Marketing Contribution equal to 3.5% of the Gross Sales of your Bakery during the preceding Accounting Week. Franchisees who entered the Bruegger's system before you (or who enter after you) may have different obligations, depending on their form of Franchise Agreement. There is no required Marketing Contribution under the License Agreement.
We have the right to allocate your Marketing Contribution in the proportion that we designate among the following: (a) the Systemwide Marketing Fund ("SMF"); (b) any Marketing Co-op we establish for your area (but we are not required to establish a Marketing Co-op for any area); and (c) local store marketing ("LSM"). Although likely to change, we presently allocate the Marketing Contribution as follows:
- We collect 50% of the Marketing Contribution (that is, 1.75% of your Gross Sales) for the SMF; and
- You must spend 50% of the Marketing Contribution (that is, 1.75% of your Gross Sales) on LSM.
SMF. The SMF is a common fund for the advertising and promotion of Bruegger's Bakeries. There is no contractual obligation for Company-owned Bakeries to contribute to the SMF. Company-owned Bakeries have contributed at times in the past, but our current policy is that they do not contribute.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, MANUALS AND TRAINING (FDD pages 32–42)
What This Means (2025 FDD)
According to Brueggers Bagels's 2025 Franchise Disclosure Document, franchisees are required to make a weekly Marketing Contribution equal to 3.5% of their bakery's Gross Sales from the preceding Accounting Week. However, the FDD notes that franchisees who entered the Brueggers Bagels system before or after the current franchisee may have different obligations based on their specific Franchise Agreement.
The document states that Brueggers Bagels has the right to allocate this Marketing Contribution among three options: the Systemwide Marketing Fund (SMF), a Marketing Co-op established for the franchisee's area, and local store marketing (LSM). Currently, Brueggers Bagels allocates the Marketing Contribution by collecting 50% (1.75% of Gross Sales) for the SMF, while the franchisee is required to spend the remaining 50% (1.75% of Gross Sales) on LSM.
The SMF is used for advertising and promotion of Brueggers Bagels bakeries. While company-owned bakeries are not contractually obligated to contribute to the SMF, they have contributed in the past, though the current policy is that they do not. During the fiscal year that ended December 31, 2024, the SMF's expenditures were allocated as follows: 68% on digital marketing, 5% on traditional marketing, 12% on agencies/production, 6% on business intelligent & supportive systems, 8% on administrative/overhead, and 1% on consumer insights & research. Brueggers Bagels retains the right to modify this allocation in the future.