Does the Brueggers Bagels Franchise Agreement grant an exclusive territory to the franchisee?
Brueggers_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
You do not receive an exclusive territory under the Franchise Agreement. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control. However, while the Franchise Agreement is in effect, we will not establish within the "Protected Area" defined in the Franchise Agreement, or franchise others to establish within the Protected Area, Bakeries of the same type that you will operate. The restriction on Bakeries of the same type does not apply to Bruegger's outlets at Co-Branded Locations, Licensed Bakeries at non-traditional facilities, sales of Bruegger's products through other channels of distribution, or sales of Bruegger's-branded products or similar products and services through other brands that we or our affiliates control or may acquire in the Protected Area, as described below in this Item.
The Franchise Agreement typically will define the Protected Area as a radius of one-anda-half miles from the front door of the Premises. In urban areas, however, the Protected Area may be smaller.
The Protected Area does not depend on your achievement of a minimum sales volume or other contingency. We do not grant you any options, rights of first refusal, or similar rights to acquire additional franchises under the Franchise Agreement.
You receive only the right to sell food and beverage items at retail to the public for carryout and/or consumption on the Premises. Your customers can come from outside of the Protected Area, but unless we expressly authorize it, you may not sell products through other channels of
distribution, such as the Internet, catalog sales, telemarketing, or other direct marketing, either inside or outside of the Protected Area. If we permit you to market through the Internet and other electronic means, we have the right to approve and control any electronic, mobile or Internet presence that uses or displays any of our Proprietary Marks or any derivative thereof.
Source: Item 12 — TERRITORY (FDD pages 42–45)
What This Means (2025 FDD)
According to the 2025 Brueggers Bagels Franchise Disclosure Document, franchisees do not receive an exclusive territory under the Franchise Agreement or the License Agreement. While franchisees do not receive an exclusive territory, Brueggers Bagels does offer a "Protected Area" around the franchisee's approved site. During the Franchise Agreement, Brueggers Bagels will not establish, or franchise others to establish, bakeries of the same type within the Protected Area. However, this restriction does not apply to co-branded locations, licensed bakeries in non-traditional facilities, sales through other distribution channels, or sales of Brueggers Bagels-branded products through other brands that Brueggers Bagels or its affiliates control.
The Protected Area is typically defined as a radius of one-and-a-half miles from the front door of the premises, but it may be smaller in urban areas. The Protected Area is not dependent on achieving a minimum sales volume or other contingency. Franchisees only have the right to sell food and beverage items at retail for carryout and/or consumption on the premises. Customers can come from outside the Protected Area, but franchisees may not sell products through other channels of distribution, such as the Internet, without express authorization.
If a franchisee signs a Development Agreement, it will define a specific geographic area (the Development Area) within which they have the right to develop bakeries. Brueggers Bagels negotiates the boundaries of the Development Area, considering factors like natural and political boundaries, population density, and the proximity of other bakeries. However, franchisees do not receive an exclusive territory under the Development Agreement either. Brueggers Bagels will not establish or franchise others to establish the same type of bakeries within the Development Area while the agreement is in effect, but this restriction has similar exceptions as the Protected Area under the Franchise Agreement.
Brueggers Bagels and its affiliates reserve all rights not expressly granted to franchisees regarding their Development Area and/or Protected Area. They can operate and franchise Brueggers Bagels outlets at co-branded locations and licensed bakeries at non-traditional facilities. They can also establish restaurants or other food service units selling similar products under different trademarks. Affiliates operate and franchise businesses under other trademarks that sell similar products, and these outlets could exist or be established in the franchisee's Development Area or Protected Area. Brueggers Bagels does not have a policy to resolve conflicts between the different brands regarding territory, customers, and franchisor support. Furthermore, Brueggers Bagels can offer and sell Bruegger's-branded products through any other distribution channel, without any obligation to compensate the franchisee.