Can Brueggers Bagels establish a company-owned outlet that is substantially identical to a franchisee's business within the franchisee's exclusive territory in Indiana?
Brueggers_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
INDIANA ADDENDUM TO THE FRANCHISE AGREEMENT AND LICENSE AGREEMENT
FRANCHISOR and FRANCHISEE have signed a Franchise Agreement or License Agreement for a franchise to be located in Indiana. This Addendum reflects provisions of Indiana law.
Pursuant to Section 23.2-2.7-1 of the Indiana Code, it is unlawful for any franchise agreement entered into between any franchisor and a franchisee who is either a resident of Indiana or a nonresident who will be operating a franchise in Indiana to contain any of the following provisions:
(2) Allowing the franchisor to establish a franchisor-owned outlet engaged in a substantially identical business to that of the franchisee within the exclusive territory granted the franchisee by the franchise agreement; or, if no exclusive territory is designated, permitting the franchisor to compete unfairly with the franchisee within a reasonable area.
(12) If the Agreement contains a provision that is inconsistent with the Indiana Code, the provisions of the Indiana Code will supersede the Agreement.
(13) This Addendum will have effect only if the Franchise Agreement or License Agreement and/or the relationship between FRANCHISOR and FRANCHISEE satisfy all of the jurisdictional requirements of the Indiana Code, without considering this Addendum. Except as expressly modified by this Addendum, the Franchise Agreement or License Agreement remains unmodified and in full force and effect.
Source: Item 23 — RECEIPTS (FDD pages 61–335)
What This Means (2025 FDD)
According to the 2025 Brueggers Bagels Franchise Disclosure Document, Indiana law impacts the ability of Brueggers Bagels to operate a company-owned store within a franchisee's exclusive territory. Specifically, the Indiana Addendum to the Franchise Agreement states that it is unlawful for the franchise agreement to allow Brueggers Bagels to establish a company-owned outlet engaged in a substantially identical business to that of the franchisee within the exclusive territory granted to the franchisee. This protection is in place to prevent direct competition from the franchisor within the franchisee's protected area.
This provision is designed to protect the franchisee's investment and business operations by ensuring that Brueggers Bagels cannot undermine the franchisee's market share by opening a competing company-owned store in the same territory. If no exclusive territory is designated, the agreement prevents Brueggers Bagels from competing unfairly with the franchisee within a reasonable area.
This addendum applies specifically to franchise agreements entered into between Brueggers Bagels and a franchisee who is either a resident of Indiana or a nonresident who will be operating a franchise in Indiana. The Indiana Code's provisions will supersede the agreement if any part of the agreement is inconsistent with the Indiana Code. This ensures that franchisees operating in Indiana receive the full protection of Indiana law, regardless of what the standard franchise agreement might state.