Can a Brueggers Bagels licensee sell the bakery assets without the licensor's consent?
Brueggers_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
During the term of the License Agreement and for as long as you have any legal or beneficial ownership interest in Licensee, you agree that you will not, without BFC's consent (which consent may be withheld at BFC's discretion) directly or indirectly (such as through an Affiliate or family members) own any legal or beneficial interest in, or render services or give advice in connection with: (a) any Competing Business located anywhere; or (b) any entity located anywhere that grants franchises or licenses interests to others to operate any Competing Business.
For a period of one (1) year after the expiration or termination of the License Agreement or the approved transfer of the Bakery to a new owner, you will not directly or indirectly own, maintain, operate, engage in, be employed by, provide assistance to, or have any interest in any Competing Business which is, or is intended to be, located within ten (10) miles of the Premises or within five (5) miles of any other BRUEGGER'S BAGELS restaurant, except for any business operated pursuant to a valid License Agreement with us or as we otherwise approve in writing.
If you fail or refuse to abide by any of the foregoing restrictions and BFC obtains enforcement in a judicial or arbitration proceeding, the obligations under the breached restriction will continue in effect for one (1) year after the date you begin to comply with the order enforcing the restriction.
Source: Item 22 — CONTRACTS (FDD page 61)
What This Means (2025 FDD)
According to Brueggers Bagels's 2025 Franchise Disclosure Document, a licensee cannot transfer their ownership interest without the franchisor's consent. Specifically, during the term of the License Agreement, a licensee cannot, without Brueggers Bagels's consent, directly or indirectly own any legal or beneficial interest in, or render services or give advice in connection with any Competing Business. This restriction applies as long as the licensee has any legal or beneficial ownership interest in the licensed business.
This provision means that a Brueggers Bagels franchisee needs to obtain approval from Brueggers Bagels before selling their bakery assets or any part of their ownership in the business. Brueggers Bagels has the discretion to withhold this consent. This is a fairly standard clause in franchise agreements, as franchisors want to ensure that any new owner meets their standards and will maintain the brand's reputation.
Furthermore, after the License Agreement expires or terminates, or after an approved transfer of the Bakery to a new owner, the franchisee is restricted from engaging in any Competing Business within a certain radius of the Brueggers Bagels location. This non-compete clause lasts for one year and extends ten miles from the original location or five miles from any other Brueggers Bagels restaurant. Failing to comply with these restrictions could result in legal action, and the obligations will remain in effect for one year after compliance with the court order is achieved.