What happens to Brueggers Bagels' liability after transferring the Franchise Agreement?
Brueggers_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
16.5.1. That all of your accrued monetary obligations and all other outstanding obligations to us and our affiliates have been satisfied;
16.5.2. That you are not in default of any provision of this Agreement, any amendment hereof or successor hereto, or any other agreement between you and us or our affiliates;
16.5.3. That the transferor executes a general release, in a form satisfactory to us, of any and all claims against us, our affiliates and their respective past, present, and future officers, directors, shareholders, and employees, in their corporate and individual capacities;
16.5.4. That the transferee (and if the transferee is a corporation, partnership, or limited liability company, such owners of a beneficial interest in the transferee as we may request) enter into a written assignment, in a form satisfactory to us, assuming and agreeing to discharge all of your obligations under this Agreement; or, at our option, enter into our then current form of Franchise Agreement; and, if the transferor guaranteed your obligations under this Agreement, that the transferee guarantee the performance of all such obligations in writing in a form satisfactory to us;
Source: Item 22 — CONTRACTS (FDD page 61)
What This Means (2025 FDD)
According to Brueggers Bagels's 2025 Franchise Disclosure Document, specifically Item 22 which discusses contracts, a transferor (the seller) seeking to transfer their franchise agreement must meet several conditions to be released from liability. These conditions ensure that Brueggers Bagels's interests are protected and that the new franchisee is capable of fulfilling the obligations of the franchise agreement.
First, all accrued monetary obligations and any other outstanding obligations to Brueggers Bagels and its affiliates must be satisfied. Second, the transferor must not be in default of any provision of the Franchise Agreement or any other agreement with Brueggers Bagels or its affiliates. Third, the transferor must execute a general release, in a form satisfactory to Brueggers Bagels, releasing any and all claims against Brueggers Bagels, its affiliates, and their respective officers, directors, shareholders, and employees.
Furthermore, the transferee (the buyer) must enter into a written assignment, in a form satisfactory to Brueggers Bagels, assuming and agreeing to discharge all of the transferor's obligations under the Franchise Agreement. Alternatively, at Brueggers Bagels's option, the transferee may enter into the then-current form of Franchise Agreement. If the transferor guaranteed the obligations under the agreement, the transferee must also guarantee the performance of all such obligations in writing, in a form satisfactory to Brueggers Bagels. These stipulations ensure a smooth transition of the franchise and protect Brueggers Bagels from potential liabilities or disruptions.