What fee deferral condition has the California Commissioner imposed on Brueggers Bagels?
Brueggers_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
The California Department of Financial Protection and Innovation has determined that we, the franchisor, have not demonstrated we are adequately capitalized and/or that we must rely on franchise fees to fund our operations. The Commissioner has imposed a fee deferral condition, which requires that we defer the collection of all initial fees from California franchisees until we have completed all of our pre-opening obligations and you are open for business. For California franchisees who sign a development agreement, the payment of the development and initial fees attributable to a specific unit in your development schedule is deferred until that unit is open.
Source: Item 23 — RECEIPTS (FDD pages 61–335)
What This Means (2025 FDD)
According to Brueggers Bagels's 2025 Franchise Disclosure Document, the California Department of Financial Protection and Innovation has determined that Brueggers Bagels has not demonstrated adequate capitalization and/or relies on franchise fees to fund its operations. As a result, the California Commissioner has imposed a fee deferral condition.
This condition requires Brueggers Bagels to defer the collection of all initial fees from California franchisees until Brueggers Bagels has completed all of its pre-opening obligations and the franchisee is open for business. This means that a new Brueggers Bagels franchisee in California will not have to pay the initial franchise fee until their bakery is ready to open.
For California franchisees who sign a development agreement with Brueggers Bagels, the payment of the development and initial fees attributable to a specific unit in their development schedule is deferred until that specific unit is open. This provides a significant benefit to multi-unit developers, as they do not have to pay fees for each unit until it is operational, reducing their upfront financial burden.