If a Brueggers Bagels franchisee's company is dissolved, does this trigger automatic termination?
Brueggers_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
- 17.1. Automatic Termination Without Notice.
You will be deemed to be in default under this Agreement, and all rights granted to you herein will automatically terminate without notice to you, if you become insolvent or make a general assignment for the benefit of creditors; if you file a petition in bankruptcy or a petition is filed against you and not opposed by you; if you are adjudicated as bankrupt or insolvent; if a bill in equity or other proceeding for the appointment of a receiver or other custodian for your business or assets is filed and consented to by you; if a receiver or other custodian (permanent or temporary) of your assets or property, or any part thereof, is appointed by any court of competent jurisdiction; if proceedings for a composition with creditors under any state or federal law are instituted by or against you; if a final judgment against you remains unsatisfied or of record for thirty (30) days or longer (unless supersedeas bond is filed); if your company is dissolved; if execution is levied against your business or property; if a suit to foreclose any lien or mortgage against you, the Premises or equipment of the Bakery is instituted and not dismissed within thirty (30) days or if you enter into any agreement that is in lieu of such foreclosure; or if the real or personal property of the Bakery is sold after levy thereupon by any sheriff, marshal, or constable.
Source: Item 22 — CONTRACTS (FDD page 61)
What This Means (2025 FDD)
According to the 2025 Brueggers Bagels Franchise Disclosure Document, the franchise agreement will automatically terminate without notice to the franchisee if the franchisee's company is dissolved. This is considered a default under the agreement, leading to immediate termination of all rights granted to the franchisee.
This automatic termination clause has significant implications for a Brueggers Bagels franchisee. If the franchisee's business entity faces dissolution for any reason, such as internal disputes, financial difficulties, or failure to comply with legal requirements, the franchise agreement will be immediately terminated. The franchisee will lose all rights to operate the Brueggers Bagels bakery without any prior warning or opportunity to rectify the situation.
It is important for prospective Brueggers Bagels franchisees to understand the conditions that can trigger automatic termination, as outlined in the franchise agreement. Maintaining the legal and financial health of the business entity is crucial to avoid such termination. Franchisees should seek legal and financial advice to ensure compliance with all applicable laws and regulations and to implement sound business practices.