Is a Brueggers Bagels franchisee allowed to divert business to a Competing Business during the agreement term?
Brueggers_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
- 19.1. During the Agreement Term. You specifically acknowledge that you will receive valuable, specialized training from us and access to confidential information regarding our operational, sales, promotional, and marketing methods and techniques of the System. You agree that, during the Agreement Term, except as we otherwise approve in writing, you will not, either directly or indirectly, for yourself or through, on behalf of, or in conjunction with any person or legal entity:
- 19.1.1. Own, maintain, operate, engage in, be employed by, provide any assistance to, or have any interest in any Competing Business, as defined below. "Competing Business" means a retail business that sells or offers bagels, cream cheese, and/or coffee products that separately or in the aggregate constitute or would constitute thirty percent (30%) or more of that business' gross revenues at any one or more retail location(s), but does not include any business that you operate under a valid franchise agreement or license agreement with us or one of our affiliates; or
- 19.1.2. Divert or attempt to divert any present or prospective business or customer to any Competing Business by direct or indirect inducement or otherwise, or do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Proprietary Marks and the System.
Source: Item 22 — CONTRACTS (FDD page 61)
What This Means (2025 FDD)
According to Brueggers Bagels's 2025 Franchise Disclosure Document, during the agreement term, a franchisee is not allowed to divert business to a competing business. Specifically, the franchisee cannot divert or attempt to divert any present or prospective business or customer to any Competing Business by direct or indirect inducement or otherwise. Additionally, they cannot perform any act that is injurious or prejudicial to the goodwill associated with the Proprietary Marks and the System. This restriction is in place unless Brueggers Bagels otherwise approves it in writing.
A "Competing Business" is defined as a retail business that sells or offers bagels, cream cheese, and/or coffee products that separately or in the aggregate constitute or would constitute thirty percent (30%) or more of that business' gross revenues at any one or more retail location(s). However, this definition does not include any business that the franchisee operates under a valid franchise agreement or license agreement with Brueggers Bagels or one of its affiliates.
This clause ensures that franchisees remain committed to the Brueggers Bagels system and do not use their knowledge or resources gained from the franchise to benefit a competing business. It protects Brueggers Bagels's market share and brand reputation by preventing franchisees from directly or indirectly drawing customers away to rival establishments during the term of their agreement.