What constitutes 'good cause' for Brueggers Bagels to refuse a transfer of ownership in Michigan?
Brueggers_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
- (g) A provision which permits a franchisor to refuse to permit a transfer of ownership of a franchise, except for good cause.
This subdivision does not prevent a franchisor from exercising a right of first refusal to purchase the franchise.
Good cause shall include, but is not limited to:
- (i) The failure of the proposed transferee to meet the franchisor's then current reasonable qualifications or standards.
- (ii) The fact that the proposed transferee is a competitor of the franchisor or subfranchisor.
- (iii) The unwillingness of the proposed transferee to agree in writing to comply with all lawful obligations.
- (iv) The failure of the franchisee or proposed transferee to pay any sums owing to the franchisor or to cure any default in the franchise agreement existing at the time of the proposed transfer.
Source: Item 23 — RECEIPTS (FDD pages 61–335)
What This Means (2025 FDD)
According to the 2025 Brueggers Bagels Franchise Disclosure Document, several conditions constitute 'good cause' for refusing a transfer of ownership in Michigan. These conditions are put in place to protect the Brueggers Bagels brand and ensure that any new owners meet certain standards.
Specifically, Brueggers Bagels may refuse a transfer if the proposed transferee does not meet the franchisor's current qualifications or standards. This could include factors like financial stability, business experience, or management skills. Additionally, if the proposed transferee is a competitor of Brueggers Bagels, the transfer can be denied. This is likely to prevent sensitive information or strategies from falling into the hands of rivals.
Furthermore, Brueggers Bagels can block a transfer if the proposed transferee is unwilling to agree in writing to comply with all lawful obligations under the franchise agreement. This ensures that the new owner is committed to upholding the standards and responsibilities of a Brueggers Bagels franchisee. Lastly, failure of the current franchisee or the proposed transferee to pay any outstanding sums to Brueggers Bagels or to resolve any existing defaults in the franchise agreement also constitutes good cause for refusing the transfer.