What is the exception to the restriction on owning a competing business near a Brueggers Bagels location after the Development Agreement expires?
Brueggers_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
For a period of one (1) year after the expiration or termination of the Development Agreement or the approved transfer of the development rights to a new owner, you will not directly or indirectly (such as through an affiliate or family members) will 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 the Development Area or within five (5) miles of any Bakery, except for any business operated pursuant to a valid franchise agreement with us or our affiliate, or as we otherwise approve in writing.
If you fail to or refuse to abide by any of the foregoing restrictions on competition and BFC obtains enforcement in a judicial or arbitration proceeding, the obligations under the breached restriction
will continue in effect for a period ending 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 FDD, for one year after the Development Agreement expires or development rights are transferred, you cannot be involved with a competing business within the Development Area or within five miles of any Brueggers Bagels Bakery. However, this restriction does not apply to any business operated under a valid franchise agreement with Brueggers Bagels or its affiliate, or if Brueggers Bagels provides written approval. This means that even after the agreement ends, you're generally barred from opening a similar business nearby unless you have explicit permission or are operating another Brueggers Bagels franchise.
This non-compete clause is fairly standard in franchising to protect the brand and market share of Brueggers Bagels. The geographic limitations (the Development Area or five miles) and the one-year time frame are designed to prevent you from immediately leveraging your knowledge and experience to compete directly with Brueggers Bagels. The exception for operating another Brueggers Bagels franchise is logical, as it keeps you within the system. The possibility of written approval from Brueggers Bagels offers some flexibility, although approval is not guaranteed.
If a franchisee violates the non-compete agreement, Brueggers Bagels can pursue legal action. If Brueggers Bagels wins the case, the restriction remains in effect for one year after the franchisee begins complying with the court order. This extended restriction serves as a further deterrent against violating the agreement. Prospective franchisees should carefully consider these restrictions and how they might impact their future business opportunities before signing the Development Agreement.