What are the components of the Brueggers Bagels Marketing Contribution allocation?
Brueggers_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
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' 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 a specific franchisee may have different obligations based on their Franchise Agreement.
The franchisor has the right to allocate this Marketing Contribution among three components: the Systemwide Marketing Fund (SMF), any Marketing Co-op established for the franchisee's area, and local store marketing (LSM). Currently, Brueggers Bagels allocates the Marketing Contribution as follows: 50% (1.75% of Gross Sales) is collected for the SMF, and the franchisee must 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. The franchisee is responsible for Local Store Marketing, and while the franchisee currently spends LSM funds directly, Brueggers Bagels reserves the right to collect and hold these funds for LSM, seeking the franchisee's guidance on how the funds are spent. If the franchisee does not provide timely guidance, Brueggers Bagels is free to direct the expenditure of the funds.