What is the purpose of the Brueggers Bagels Systemwide Marketing Fund (SMF)?
Brueggers_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
MF; and
- You must spend 50% of the Marketing Contribution (that is, 1.75% of your Gross Sales) on LSM.
SMF. The SMF is a common fund for the advertising and promotion of Bruegger's Bakeries. There is no contractual obligation for Company-owned Bakeries to contribute to the SMF. Company-owned Bakeries have contributed at times in the past, but our current policy is that they do not contribute.
We have the right to direct all advertising, media placement, marketing and public relations programs and activities financed by the SMF, with final discretion over strategic direction, creative concepts, materials and endorsements used, and the geographic, market and media placement and allocation. We may use the SMF to pay various costs and expenses as we determine, including: preparation and production of video, audio, written, and online advertising materials; production of promotional materials; sponsorship of sporting, charitable, or similar events; design, establishment, and maintenance of websites, search rankings, social media profiles and other online and mobile presence; endorsement contracts; reasonable salaries and expenses of our and our affiliates' employees working for or on behalf of the SMF or on advertising, marketing, public relations, materials, programs, activities or promotions prepared, planned or undertaken on behalf of the SMF; professional fees and administrative costs and overhead incurred in activities reasonably related to the administration and activities of the SMF (including accounting fees, legal fees, and interest on monies borrowed by the SMF); implementation of advertising programs, including purchasing direct mail and media advertising and employing advertising agencies to assist us; and other public relations, marketing, consumer research, and promotional activities, including testing and test marketing programs, fulfillment charges, and development and implementation and testing of trade dress and design prototypes.
We have no obligation to spend any specific portion of the SMF in the geographic area of your Bakery. The media that we use may be local, regional, or national in coverage. We or an advertising agency may prepare the advertising for the SMF. We also use the SMF to support our web site, which has a section describing our franchise opportunity. Otherwise, we do not use any SMF monies for advertising that is principally a solicitation for the sale of franchises.
We have established an Advisory Board to provide input on the administration of the SMF. All franchisees who are in full compliance with their obligations under their agreements with us are eligible to become members of the Advisory Board. The Advisory Board does not have decision-making authority, and we retain the right to dissolve the Advisory Board at any time.
In addition to your regular Marketing Contribution, you may incur charges for copies of SMF-produced materials that you order.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, MANUALS AND TRAINING (FDD pages 32–42)
What This Means (2025 FDD)
According to Brueggers Bagels' 2025 Franchise Disclosure Document, the Systemwide Marketing Fund (SMF) is a collective fund used for advertising and promoting Brueggers Bagels bakeries. Franchisees contribute a percentage of their gross sales to this fund, specifically 1.75% of gross sales, which represents 50% of their total required weekly marketing contribution of 3.5%. While company-owned bakeries are not contractually obligated to contribute, franchisee contributions are essential for the SMF's operation. Brueggers Bagels has the authority to direct all advertising, marketing, and public relations activities financed by the SMF.
The funds within the SMF can be used for a variety of purposes, including the creation and production of advertising materials (video, audio, written, and online), promotional materials, sponsorships, website and social media management, endorsement contracts, and salaries/expenses for employees working on SMF-related activities. Additionally, the SMF covers professional fees, administrative costs, overhead, and the implementation of advertising programs, including media purchasing, and consumer research. Brueggers Bagels is not obligated to spend any specific portion of the SMF in the geographic area of a franchisee's bakery, and the media used can be local, regional, or national.
Brueggers Bagels maintains the SMF monies in a separate account but not as a trustee or fiduciary. Unspent contributions remain in the SMF for use in subsequent years. While an audit of the SMF is not required, Brueggers Bagels will provide an annual accounting of receipts and disbursements upon request. For the fiscal year ending December 31, 2024, the SMF expenditures were allocated as follows: 68% on digital marketing, 5% on traditional marketing, 12% on agencies/production, 6% on business intelligent & supportive systems, 8% on administrative/overhead, and 1% on consumer insights & research. Franchisees may also incur charges for copies of SMF-produced materials that they order.