After the expiration or termination of a Brueggers Bagels franchise agreement, for how long is the franchisee prohibited from engaging in a Competing Business?
Brueggers_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
You agree that, except pursuant to other Franchise Agreements with us or our affiliates, or as we otherwise approve in writing, you will not, for one (1) year after the expiration or termination of this Agreement or the approved transfer of this Agreement to a new franchisee, either directly or indirectly, for yourself or through, on behalf of, or in conjunction with any person or legal entity, 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 Bakery.
Source: Item 22 — CONTRACTS (FDD page 61)
What This Means (2025 FDD)
According to Brueggers Bagels' 2025 Franchise Disclosure Document, franchisees are restricted from involvement in a Competing Business for one year after the expiration or termination of their Franchise Agreement, or after an approved transfer of the bakery to a new owner. This restriction prevents the franchisee from owning, maintaining, operating, or being employed by a Competing Business within ten miles of the original Brueggers Bagels location or within five miles of any other Brueggers Bagels bakery.
A "Competing Business" is defined as a retail business that generates 30% or more of its gross revenues from the sale of bagels, cream cheese, and/or coffee products. This definition is crucial for franchisees to understand, as it clarifies what types of businesses are considered competitive and therefore prohibited. However, this restriction does not apply if the franchisee operates a business under a valid franchise or license agreement with Brueggers Bagels or its affiliates, or if Brueggers Bagels provides written approval.
If a franchisee violates these restrictions, and Brueggers Bagels pursues legal action to enforce the non-compete clause, the restriction remains in effect for one year after the franchisee begins complying with the court or arbitrator's order. This extended period ensures that Brueggers Bagels is protected from unfair competition even if the franchisee initially resists compliance. This non-compete agreement is a standard practice in franchising to protect the brand and other franchisees in the system.