To whom is the initial license fee for a Brueggers Bagels franchise paid?
Brueggers_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Expenditure | Amount | Method of | When Due | To Whom Payment |
|---|---|---|---|---|
| (Note 1) | Payment | is to be Made | ||
| Initial License Fee (Note 2) | $12,500 | Lump sum | Upon signing the License Agreement | Us |
| Real Property | $8,750 to | As Arranged | As Arranged | Lessor |
| (Note 3) | $45,000 | |||
| Design, Permitting Fees (Note 4) | $36,000 to $79,000 | As Arranged | As Incurred | Contractors and Government Agencies |
| Building and Leasehold Improvements (Note 5) | $400,000 to $550,000 | As Arranged | As Incurred | Contractors and Vendors |
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 18–25)
What This Means (2025 FDD)
According to Brueggers Bagels's 2025 Franchise Disclosure Document, the initial license fee is paid directly to the franchisor, referred to as "Us" in the document. For a Licensed Bakery, the initial license fee is $12,500, payable in a lump sum upon signing the License Agreement.
For a Franchised Bakery, the initial franchise fee is $35,000, also paid in a lump sum when the Franchise Agreement is signed. These fees are generally non-refundable, although a credit may be applied from development fees under certain conditions if a Development Agreement is also in place. Specifically, a credit of $10,000 for each bakery the franchisee agrees to develop may be applied towards the initial franchise fee, provided the franchisee is in compliance with their obligations under both the Development Agreement and all License Agreements.
It is important to note that these fees are distinct from other expenses such as real property costs, design and permitting fees, and building and leasehold improvements, which are paid to lessors, contractors, and government agencies as incurred. Understanding to whom each payment is made is crucial for managing the initial investment effectively.