What happens if a Brueggers Bagels franchisee fails to meet the Development Schedule?

According to Brueggers Bagels' 2025 Franchise Disclosure Document, a franchisee's failure to open the required number of bakeries by the deadlines outlined in the Development Schedule can lead to significant consequences. Specifically, Brueggers Bagels has the right to terminate the Development Agreement. This means the franchisee would lose the rights to develop additional Brueggers Bagels locations as previously agreed upon.

Furthermore, the FDD states that the termination of the Development Agreement can trigger a cross-default on any other Franchise Agreements the franchisee may have with Brueggers Bagels. In simpler terms, if a franchisee has multiple Brueggers Bagels locations operating under separate franchise agreements, a failure to meet the development schedule in one agreement can cause all other franchise agreements to be terminated as well. This could result in the franchisee losing the right to operate all of their Brueggers Bagels locations.

This clause highlights the importance of carefully considering the Development Schedule and ensuring that the franchisee has the resources and capabilities to meet the agreed-upon deadlines. Prospective franchisees should discuss the Development Schedule in detail with Brueggers Bagels and fully understand the potential ramifications of failing to meet those deadlines. It is also advisable to seek legal counsel to review the Development Agreement and Franchise Agreements to fully understand the implications of a cross-default provision.