Does Brueggers Bagels have control over the franchisee's funds or expenditures?
Brueggers_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
We may use the SMF to pay various costs and expenses as we determine in our sole discretion, including, without limitation: preparation and production of video, audio, written, online and mobile advertising materials; production of promotional materials; sponsorship of sporting, charitable, or similar events; design, establishment, and maintenance of web sites, search rankings, social media profiles and other online and mobile presence; endorsement contracts; reasonable salaries and expenses of our and our affiliates' employees who work on advertising, marketing, public relations materials, programs, activities or promotions prepared, planned or undertaken on behalf of the SMF; professional fees and administrative costs and overhead that we or our affiliates incur in activities reasonably related to the administration and activities of the SMF (including accounting fees, legal fees, and interest on monies borrowed by the SMF); implementation of advertising programs, including, without limitation, purchasing direct mail and other media advertising and employing advertising agencies to assist us; and other public relations, marketing, consumer research, and promotional activities, including testing and test marketing programs, fulfillment charges, and development and implementation and testing of trade dress and design prototypes.
- 14.4.2. We will seek the advice of Bruegger's franchisees by formal or informal means with respect to the creative concepts and media used for programs financed by the SMF.
We retain the final authority on all programs financed by the SMF.
We have the right to change or dissolve the SMF.
- 14.4.3. You acknowledge that the SMF and any earnings thereon will be used to maximize general public recognition, acceptance, and patronage of Bruegger's outlets, and that we are not obligated, in administering the SMF, to make expenditures for you which are equivalent or proportional to your contribution, or to ensure that any particular franchisee benefits directly or pro rata from expenditures by the SMF.
Your failure to derive any such benefit will not serve as a basis for a reduction or elimination of your obligation to contribute to the SMF.
The failure (whether
Source: Item 22 — CONTRACTS (FDD page 61)
What This Means (2025 FDD)
According to the 2025 Brueggers Bagels Franchise Disclosure Document, Brueggers Bagels maintains control over the Brand Marketing Fund (SMF). Brueggers Bagels can use the SMF to cover various costs and expenses at their discretion. These expenses include creating advertising materials, producing promotional materials, sponsoring events, managing websites and social media, securing endorsement contracts, and covering salaries and expenses for employees working on advertising and marketing for the SMF. They can also use the fund for professional fees, administrative costs, overhead, and implementing advertising programs, including direct mail and media advertising.
While Brueggers Bagels will seek advice from franchisees regarding creative concepts and media used for programs financed by the SMF, they retain the final authority on all programs financed by the SMF. Brueggers Bagels also has the right to change or dissolve the SMF.
The FDD clarifies that the SMF aims to maximize general public recognition and patronage of Brueggers Bagels outlets. Brueggers Bagels is not obligated to make expenditures for a franchisee that are equivalent or proportional to the franchisee's contribution, or to ensure that any particular franchisee benefits directly or pro rata from SMF expenditures. A franchisee's failure to derive such benefit will not reduce their obligation to contribute to the SMF, nor will the failure of any other franchisee to contribute release or reduce that obligation.