What happens to the Development Fee if the Brueggers Bagels Development Agreement is terminated for my default?
Brueggers_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
- 10.1.6. Promptly pay all sums owing to us and our affiliates. In the event of termination for your default, the sums will include all damages, costs, and expenses incurred by us as a result of the default, including, but not limited to, reasonable attorneys' fees. You will have no right to a refund of all or any part of the Development Fee, regardless of whether you entered into a Franchise Agreement prior to such termination. We will retain all amounts paid to us pursuant to the terms of this Agreement.
Source: Item 22 — CONTRACTS (FDD page 61)
What This Means (2025 FDD)
According to the 2025 Brueggers Bagels Franchise Disclosure Document, if the Development Agreement is terminated due to your default, you will not receive a refund of the Development Fee. Brueggers Bagels will retain all amounts paid under the terms of the agreement. This means that any money you've already paid to Brueggers Bagels as part of the Development Fee will not be returned to you if you breach the agreement and it's terminated as a result.
In addition to losing the Development Fee, you will also be responsible for paying Brueggers Bagels all damages, costs, and expenses they incur as a result of your default. This includes, but is not limited to, reasonable attorneys' fees. This could potentially add a significant financial burden on top of the lost Development Fee.
This policy is fairly standard in the franchise industry, as initial fees are generally non-refundable once paid. Prospective Brueggers Bagels franchisees should carefully consider their ability to meet the obligations of the Development Agreement before signing, as failure to do so could result in the loss of the Development Fee and additional expenses.