Are Company-owned Brueggers Bagels Bakeries contractually obligated to contribute to the SMF?
Brueggers_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
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 the 2025 Brueggers Bagels FDD, Company-owned Brueggers Bagels bakeries do not have a contractual obligation to contribute to the Systemwide Marketing Fund (SMF). While these company-owned locations may have contributed to the SMF in the past, the current policy is that they are not required to do so. This means that franchisees are primarily responsible for funding the SMF through their Marketing Contributions.
Franchisees are required to make a weekly Marketing Contribution equal to 3.5% of their bakery's gross sales from the preceding accounting week. Of this contribution, 50% (or 1.75% of gross sales) is allocated to the SMF, while the other 50% must be spent on local store marketing (LSM). The SMF is used for advertising and promotion of Brueggers Bagels bakeries, and Brueggers Bagels has the right to direct all advertising, media placement, marketing, and public relations programs financed by the SMF.
This arrangement means that franchisees bear the responsibility for funding the SMF, which is used for system-wide marketing efforts. While company-owned stores are not contractually obligated to contribute, the FDD does not specify whether they may contribute voluntarily. A prospective franchisee should confirm with Brueggers Bagels whether company-owned stores ever contribute to the SMF and under what circumstances.