What happens to the Development Area if the Brueggers Bagels Development Agreement is terminated or expires?

According to Brueggers Bagels's 2025 Franchise Disclosure Document, if the Development Agreement is terminated or expires, Brueggers Bagels has the right to own, operate, franchise, and license others to operate Bakeries in the Development Area. This means that upon termination or expiration, the franchisee loses all rights to the Development Area. Brueggers Bagels can then establish its own stores, award franchises to others, or license the Brueggers Bagels brand to third parties within the former Development Area.

This is a significant consideration for prospective franchisees entering into a Development Agreement with Brueggers Bagels. The franchisee risks losing the entire Development Area if the agreement is terminated or expires. Termination can occur if the franchisee fails to meet the Development Schedule, which outlines the number of Bakeries to be developed and the dates by which they must open.

This provision highlights the importance of meeting the obligations outlined in the Development Agreement. A franchisee should carefully review the Development Schedule and ensure they have the resources and capabilities to meet the required development pace. Failure to do so could result in the loss of the Development Area and the potential for Brueggers Bagels or other franchisees to establish competing locations in the area the franchisee had planned to develop. This is a fairly standard clause in development agreements within the franchise industry, designed to ensure that territories are actively developed according to the agreed-upon schedule.