Where in the Brueggers Bagels Development Agreement can I find information regarding restrictions on competition?
Brueggers_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 22: CONTRACTS]
Developer is developing one or more Bruegger's ("Bakeries) pursuant to a Development Agreement (the "Development Agreement") with BRUEGGER'S FRANCHISE CORPORATION ("BFC").
The Development Agreement requires persons with legal or beneficial ownership interests in Developer to be personally bound by Developer's obligations under the Development Agreement, including restrictions on competition, confidentiality obligations, restrictions on ownership changes, and dispute resolution provisions.
All capitalized terms used in this document have the same meaning as in the Development Agreement.
You own or intend to own a legal or beneficial ownership interest in Developer.
You acknowledge and agree that: (a) your execution of this Agreement is a condition of acquiring and holding your ownership interest in Developer; and (b) you have received good and valuable consideration for executing this Agreement.
BFC may enforce this Agreement directly against you.
If a business entity signs this Agreement, all persons who have a legal or beneficial ownership interest in that business entity must also execute this Agreement.
You may gain access to confidential information and trade secrets of BFC as a result of investing in Developer.
You agree that while you have a legal or beneficial ownership interest in Developer and thereafter you: (a) will not use the confidential information in any other business or capacity (such use being an unfair method of competition); (b) will exert best efforts to maintain the confidentiality of the confidential information; and (c) will not make unauthorized copies of any portion of the confidential information disclosed in written, electronic or other form.
If you cease to have an interest in Developer, you must deliver to BFC any such confidential information in your possession or control.
During the term of the Development Agreement and for as long as you have any legal or beneficial ownership interest in Developer, you agree that you will not, without BFC's consent (which consent may be withheld at BFC's discretion) directly or indirectly (such as through an affiliate or family members) own any legal or beneficial interest in, or render services or give advice in connection with: (a) any Competing Business located anywhere; or (b) any entity located anywhere that grants franchises or licenses interests to others to operate any Competing Business.
Source: Item 22 — CONTRACTS (FDD page 61)
What This Means (2025 FDD)
According to Brueggers Bagels' 2025 Franchise Disclosure Document, Item 22 discusses contracts related to the Development Agreement, including restrictions on competition. Specifically, section 6 of Item 22 states that during the term of the Development Agreement, individuals with legal or beneficial ownership in the Developer cannot, without Brueggers Bagels' consent, directly or indirectly own interest in or provide services to any Competing Business. This restriction applies regardless of the location of the Competing Business.
Additionally, Item 22 outlines that the Development Agreement requires individuals with ownership interests to be personally bound by the obligations, including the restrictions on competition. This means that anyone holding an ownership stake in the Development Agreement is subject to these competitive restrictions. The agreement also specifies that gaining access to confidential information and trade secrets of Brueggers Bagels as a result of investing in the Developer carries an obligation to not use this information in any other business, as it would be considered unfair competition.
For potential Brueggers Bagels developers, these clauses are significant. They limit the franchisee's ability to engage with competing businesses during the agreement and potentially afterwards, safeguarding Brueggers Bagels' market position and proprietary information. Franchisees should carefully consider these restrictions and seek clarification from Brueggers Bagels regarding the scope and implications of these clauses before entering into a Development Agreement.