What is an exception to the non-compete clause after the expiration or termination of a Brueggers Bagels Franchise Agreement?
Brueggers_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
For a period of one (1) year after the expiration or termination of the Franchise Agreement or the approved transfer of the Bakery to a new owner, you will not directly or indirectly own, maintain, operate, engage in, be employed by, provide assistance to, or have any interest in any Competing Business which is, or is intended to be, located within ten (10) miles of the Premises or within five (5) miles of any other Bruegger's Bakery, except for any business operated pursuant to a valid franchise agreement or license agreement with us or one of our affiliates, or as we otherwise approve in writing. If you fail or refuse to abide by any of the foregoing restrictions and BFC obtains enforcement in a judicial or arbitration proceeding, the obligations under the breached restriction will continue in effect for one (1) year after the date you begin to comply with the order enforcing the restriction.
Source: Item 22 — CONTRACTS (FDD page 61)
What This Means (2025 FDD)
According to the 2025 Brueggers Bagels Franchise Disclosure Document, there are specific exceptions to the non-compete agreement that apply after the expiration or termination of the franchise agreement. Generally, for one year after the agreement ends or the bakery is transferred, a franchisee cannot be involved with a competing business within ten miles of the former Brueggers Bagels location or within five miles of any other Brueggers Bagels. A "Competing Business" is defined as a retail business that sells bagels, cream cheese, and/or coffee products that constitute 30% or more of the business's gross revenues.
However, this restriction does not apply if the competing business is operated under a valid franchise or license agreement with Brueggers Bagels or its affiliates. Additionally, Brueggers Bagels may provide written approval allowing the franchisee to engage in a competing business, effectively waiving the non-compete restriction in specific cases.
It is important to note that if a franchisee violates the non-compete agreement and Brueggers Bagels pursues legal action, the restriction will remain in effect for one year after the franchisee begins to comply with the court or arbitrator's order. This ensures that Brueggers Bagels can protect its market and brand integrity even if a former franchisee attempts to compete unfairly.