What obligation does the developer undertake regarding Brueggers Bagels Bakeries?
Brueggers_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
Developer is developing one or more Bruegger's ("Bakeries) pursuant to a Development Agreement (the "Development Agreement") with BRUEGGER'S FRANCHISE CORPORATION ("BFC").
The Development Agreement requires persons with legal or beneficial ownership interests in Developer to be personally bound by Developer's obligations under the Development Agreement, including restrictions on competition, confidentiality obligations, restrictions on ownership changes, and dispute resolution provisions.
You own or intend to own a legal or beneficial ownership interest in Developer.
You acknowledge and agree that: (a) your execution of this Agreement is a condition of acquiring and holding your ownership interest in Developer; and (b) you have received good and valuable consideration for executing this Agreement.
BFC may enforce this Agreement directly against you.
You may gain access to confidential information and trade secrets of BFC as a result of investing in Developer.
You agree that while you have a legal or beneficial ownership interest in Developer and thereafter you: (a) will not use the confidential information in any other business or capacity (such use being an unfair method of competition); (b) will exert best efforts to maintain the confidentiality of the confidential information; and (c) will not make unauthorized copies of any portion of the confidential information disclosed in written, electronic or other form.
During the term of the Development Agreement and for as long as you have any legal or beneficial ownership interest in Developer, 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.
THE SUCCESS OF DEVELOPER IN OPERATING A FRANCHISE IS SPECULATIVE AND SHALL DEPEND ON MANY FACTORS INCLUDING, TO A LARGE EXTENT, DEVELOPER'S INDEPENDENT BUSINESS ABILITY. THIS OFFERING IS NOT A SECURITY AS THAT TERM IS DEFINED UNDER APPLICABLE FEDERAL AND STATE SECURITIES LAWS. THE OBLIGATION TO TRAIN, MANAGE, PAY, RECRUIT AND SUPERVISE EMPLOYEES OF THE BAKERY RESTS SOLELY WITH DEVELOPER.
Source: Item 22 — CONTRACTS (FDD page 61)
What This Means (2025 FDD)
According to the 2025 Brueggers Bagels FDD, a developer is developing one or more Brueggers Bagels Bakeries under a Development Agreement with Bruegger's Franchise Corporation (BFC). This agreement mandates that individuals with legal or beneficial ownership interests in the developer are personally bound by the developer's obligations. These obligations include restrictions on competition, confidentiality, ownership changes, and dispute resolution.
Specifically, anyone with an ownership interest in the developer must agree to the terms of the Development Agreement as a condition of holding that interest. Brueggers Bagels has the right to directly enforce this agreement against these individuals. Furthermore, these individuals gain access to confidential information and trade secrets of BFC through their investment in the developer. They must not use this information in any other business, must maintain its confidentiality, and must not make unauthorized copies.
During the term of the Development Agreement and as long as they have an ownership interest in the developer, they cannot, without BFC's consent, own any interest in or provide services to any competing business. This restriction applies directly or indirectly, such as through affiliates or family members. The success of the developer in operating a Brueggers Bagels franchise is speculative and depends largely on the developer's business ability, and the obligation to train, manage, pay, recruit, and supervise bakery employees rests solely with the developer.