Can Brueggers Bagels operate or franchise bakeries outside of a franchisee's protected area?
Brueggers_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
1.6. We and our affiliates retain the rights, despite anything to the contrary in Section 1.5 and regardless of the proximity to or effect on any Bakery that you operate:
1.6.1. To own, acquire, establish, operate and franchise or license others to operate Bakeries located outside of the Development Area;
1.6.2. To own, acquire, establish, operate, and franchise or license others to operate outlets at Non-Traditional Locations under the Bruegger's name or any other name, whether inside or outside of the Development Area. "Non-Traditional Location" means a facility where the primary function is not a Bakery business, such as (but not limited to) a performing arts center, arena, stadium, shopping mall, department store, retail store, wholesale club, grocery store, supermarket, casino, amusement park, fairground, college or university, factory, hospital, penal institution, military base, airport, turnpike, limited access highway rest stop, or other transportation facility;
1.6.3. To develop, manufacture, have manufactured, market, sell and distribute, at retail or wholesale, and license others to manufacture, sell or distribute, packaged food products or any other goods or services under the Bruegger's mark or any other name or mark, through any channel of distribution other than a Bakery, including but not limited to the Internet, supermarkets, specialty food stores, convenience stores, wholesale clubs and retail food stores, anywhere in the world; and
1.6.4. To use the Bruegger's brand in other lines of business besides the operation of restaurants, anywhere in the world.
Source: Item 22 — CONTRACTS (FDD page 61)
What This Means (2025 FDD)
According to the 2025 Brueggers Bagels Franchise Disclosure Document, Brueggers Bagels retains the right to operate or franchise bakeries outside a franchisee's protected or development area. Specifically, Brueggers Bagels can own, acquire, establish, operate, and franchise bakeries outside of a franchisee's development area. They also retain the right to operate outlets at non-traditional locations, co-branded locations, or through other channels of distribution, irrespective of whether these are inside or outside the franchisee's protected area. These rights are retained by Brueggers Bagels and its affiliates, regardless of the proximity to or effect on any bakery that a franchisee operates.
This means that while a franchisee may have some territorial protection, Brueggers Bagels can still establish other outlets that may compete, especially in non-traditional locations like airports, universities, or supermarkets. This is a fairly common practice in franchising, as franchisors often seek multiple avenues for brand expansion. However, it is important for a prospective franchisee to understand that their protected area does not guarantee complete exclusivity from the Brueggers Bagels brand itself.
Prospective franchisees should carefully consider the implications of these retained rights. While the franchise agreement offers some territorial protection, it is not absolute. Understanding the potential for Brueggers Bagels to establish other outlets nearby, particularly in non-traditional locations, is crucial for assessing the potential market and competition. It would be prudent to discuss with Brueggers Bagels their specific plans for expansion in the franchisee's target market to fully understand the potential competitive landscape.