When must Brueggers Bagels defer the collection of initial fees from California franchisees?
Brueggers_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
The California Department of Financial Protection and Innovation has determined that we, the franchisor, have not demonstrated we are adequately capitalized and/or that we must rely on franchise fees to fund our operations. The Commissioner has imposed a fee deferral condition, which requires that we defer the collection of all initial fees from California franchisees until we have completed all of our pre-opening obligations and you are open for business. For California franchisees who sign a development agreement, the payment of the development and initial fees attributable to a specific unit in your development schedule is deferred until that unit is open.
Source: Item 23 — RECEIPTS (FDD pages 61–335)
What This Means (2025 FDD)
According to the 2025 Brueggers Bagels Franchise Disclosure Document, Brueggers Bagels must defer the collection of all initial fees from California franchisees under specific conditions. The California Department of Financial Protection and Innovation has determined that Brueggers Bagels has not demonstrated adequate capitalization or that it relies on franchise fees to fund its operations.
Because of this determination, the Commissioner has imposed a fee deferral condition. This condition mandates that Brueggers Bagels must defer collecting initial fees from California franchisees until it has fulfilled all pre-opening obligations and the franchisee is open for business.
For California franchisees who enter into a development agreement with Brueggers Bagels, the payment of development and initial fees related to a specific unit within their development schedule is deferred until that particular unit is open. This addendum ensures compliance with California law and protects franchisees by aligning fee collection with the progress of the franchise setup and operation.