If the Brueggers Bagels Development Agreement is terminated for my default, what sums will I owe?
Brueggers_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
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 Brueggers Bagels's 2025 Franchise Disclosure Document, if the Development Agreement is terminated due to your default, you are obligated to promptly pay all sums owed to Brueggers Bagels and its affiliates. These sums encompass all damages, costs, and expenses incurred by Brueggers Bagels as a result of the default. This includes, but is not limited to, reasonable attorneys' fees.
Furthermore, the agreement stipulates that you will not be entitled to a refund of any portion of the Development Fee, irrespective of whether a Franchise Agreement was entered into before the termination. Brueggers Bagels will retain all amounts that have been paid under the terms of the Development Agreement.
This means that a franchisee who defaults on the Development Agreement risks losing the entire Development Fee, in addition to being responsible for covering Brueggers Bagels's associated damages, costs, expenses, and legal fees resulting from the default. This could represent a significant financial burden for a franchisee who fails to meet their development obligations.
It is important to note that this obligation to cover damages, costs, expenses, and legal fees is a fairly standard clause in franchise agreements. Franchisees should carefully consider the implications of defaulting on their agreements and the potential financial repercussions.