Can Brueggers Bagels receive rebates from unaffiliated vendors based on sales to franchisees?
Brueggers_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
restrictions.
ITEM 8 RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES
You must purchase your food and beverage products, ingredients, packaging materials, menus, signs, technology suite, equipment, furniture, smallwares, décor items, and other products and services in accordance with our specifications and quality standards and, if applicable, only from suppliers we have designated or approved (which may include us or our affiliates). We and our affiliates may earn a profit on products and services sold to you and other Bakery franchisees or receive rebates or other consideration from unaffiliated suppliers with respect to their sales of products or services to you or other Bakery franchisees, whether or not the product or service is presently mentioned in this Item. We have the right to designate only one supplier (which may be us or our affiliates) for certain items (such as distribution of food products, soft drinks, etc.) in order to take advantage of marketplace efficiencies.
If we do not require you to use a designated source or approved supplier for a particular item, you may purchase the item from any vendor you choose, so long as your purchases conform to our standards and specifications. We have the right to restrict the sourcing of current and future items. We and our affiliates may earn a profit on products and services sold to you and other Bruegger's franchisees, and may receive rebates or other consideration from unaffiliated vendors with respect to their sales of products or services to you or other Bruegger's franchisees, whether or not the product or service presently mentioned in this Item.
Proprietary Food Items. Certain of the food items in Bruegger's Bakeries are proprietary (such as dough and cream cheese). We will have the right to periodically introduce additional or new proprietary items. Proprietary items are considered integral components of a Bruegger's franchise and are inextricably interrelated with the Proprietary Marks and the System. The proprietary items that are offered and sold in Bakeries are manufactured in accordance with the secret blends, standards, and specifications that we or our affiliates own.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 25–29)
What This Means (2025 FDD)
According to Brueggers Bagels's 2025 Franchise Disclosure Document, Brueggers Bagels and its affiliates may receive rebates or other consideration from unaffiliated suppliers based on the sales of products or services to Brueggers Bagels franchisees. This applies whether or not the specific product or service is mentioned in Item 8 of the FDD.
This arrangement means that the cost of goods and services for franchisees could be influenced by these rebates, potentially affecting the franchisee's profit margins. While Brueggers Bagels is entitled to these rebates, they may also require Brueggers Bagels to use the vendor's rebates or marketing contributions at the national level rather than forwarding them to individual Bakeries. In these cases, Brueggers Bagels deposits the monies in the SMF (see Item 11 for details about the SMF).
As a prospective franchisee, it is important to understand how these rebates are handled and whether they will directly benefit your bakery or be used for national marketing efforts. It would be prudent to inquire with Brueggers Bagels about the specific policies regarding these rebates and how they are allocated, as well as to review Item 11 for more details about the SMF.