When can Brueggers Bagels exercise a right or discretion based on its judgment of what is in its best interests?
Brueggers_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
Notwithstanding any contrary provisions contained in this Agreement, Franchisor and Franchisee acknowledge and agree that (a) this Agreement (and the relationship of the parties which arises from this Agreement) grants Franchisor the discretion to make decisions, take actions and/or refrain from taking actions not inconsistent with Franchisee's explicit rights and obligations hereunder that may affect favorably or adversely Franchisee's interests; (b) Franchisor shall use its business judgment in exercising such discretion based on its assessment of its own interests and balancing those interests against the interests of the owners of Bakeries generally (including Franchisor and its affiliates and other franchisees), and specifically without considering Franchisee's individual interests or the individual interests of any other particular franchisee; (c) Franchisor shall have no liability to Franchisee for the exercise of its discretion in this manner; and (d) even if Franchisor has numerous motives for a particular action or decision, so long as at least one motive is a reasonable business justification no trier of fact in any legal action shall substitute its judgment for Franchisor's judgment so exercised, and such action or decision shall not be subject to challenge for abuse of discretion**.
IF FRANCHISOR TAKES ANY ACTION OR CHOOSES NOT TO TAKE ANY ACTION IN ITS DISCRETION WITH REGARD TO ANY MATTER RELATED TO THIS AGREEMENT AND SUCH ACTION OR INACTION IS CHALLENGED FOR ANY REASON, THE PARTIES SHALL AGREE TO EXPRESSLY DIRECT THE TRIER OF FACT, IN ANY PLEADING FILED OR LEGAL PROCEEDING RESULTING THERETO, THAT FRANCHISOR'S RELIANCE ON A BUSINESS REASON IN THE EXERCISE OF ITS DISCRETION UNDER THE BUSINESS JUDGMENT RULE IS TO BE VIEWED AS A REASONABLE AND PROPER EXERCISE OF ITS DISCRETION, WITHOUT REGARD TO WHETHER OTHER REASONS FOR ITS DECISION MAY EXIST AND WITHOUT REGARD TO WHETHER THE TRIER OF FACT WOULD INDEPENDENTLY ACCORD THE SAME WEIGHT TO THE BUSINESS REASON.**
Source: Item 22 — CONTRACTS (FDD page 61)
What This Means (2025 FDD)
According to Brueggers Bagels's 2025 Franchise Disclosure Document, Brueggers Bagels retains the discretion to make decisions, take actions, or refrain from taking actions that may affect a franchisee's interests, provided these actions are consistent with the franchisee's explicit rights and obligations under the License Agreement. This discretion is exercised based on Brueggers Bagels's assessment of its own interests and a balancing of those interests against the interests of the owners of Bakeries generally, which includes Brueggers Bagels, its affiliates, and other franchisees.
Brueggers Bagels explicitly states that it will not consider the individual interests of any particular franchisee when making these decisions. Furthermore, Brueggers Bagels assumes no liability to the franchisee for exercising its discretion in this manner. Even if Brueggers Bagels has multiple motives for a decision, the decision will not be subject to challenge for abuse of discretion as long as at least one motive is a reasonable business justification.
In any legal challenge to Brueggers Bagels's actions or inactions related to the License Agreement, the parties agree to instruct the trier of fact to view Brueggers Bagels's reliance on a business reason as a reasonable and proper exercise of its discretion. This holds true regardless of whether other reasons for the decision exist and irrespective of whether the trier of fact would independently assign the same weight to the business reason. This clause essentially protects Brueggers Bagels's business judgment from being second-guessed in legal proceedings, provided there is a reasonable basis for their decision-making.