What recourse does Brueggers Bagels have if a franchisee loses the right to possession of the premises?
Brueggers_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
- 17.2.3. If you cease to operate or otherwise abandon the Bakery for two (2) consecutive business days during which you are otherwise required to be open, without our prior written consent to do so, or if you lose the right to possession of the Premises, or forfeit the right to do or transact business in the jurisdiction where the Premises are located.
However, if, through no fault of your own, the Premises are damaged or destroyed by an event such that repairs or reconstruction cannot be completed within sixty (60) days thereafter, then you will have thirty (30) days after that event in which to apply for our approval to relocate and/or reconstruct the Bakery, which approval will not be unreasonably withheld;
Source: Item 22 — CONTRACTS (FDD page 61)
What This Means (2025 FDD)
According to Brueggers Bagels' 2025 Franchise Disclosure Document, if a franchisee loses the right to possession of their premises, it constitutes an event of default under the franchise agreement. Specifically, if the franchisee loses the right to possession of the premises, Brueggers Bagels has the right to terminate the franchise agreement. However, an exception exists if the loss of possession is due to damage or destruction of the premises through no fault of the franchisee, making repairs or reconstruction unfeasible within 60 days. In such cases, the franchisee has 30 days to apply for approval to relocate or reconstruct the bakery, which Brueggers Bagels will not unreasonably withhold.
Additionally, the FDD outlines Brueggers Bagels' rights regarding the premises and its branding elements. Upon termination of the lease or the franchisee's right to possession, Brueggers Bagels has the right to enter the premises and make necessary modifications to protect or remove its System or Proprietary Marks. This must be done within 30 days of receiving written request from the landlord. After this 30-day period, it is assumed that no further modifications are needed, and Brueggers Bagels relinquishes its right to enter the premises or object to the landlord's use or disposal of the franchisee's property.
Furthermore, the landlord agrees not to lease space to any competing business during the lease term, except after the franchisee's right to possession has been terminated. Brueggers Bagels also has the option to enter into a new lease with the landlord under terms no less favorable than the original lease. To secure possession, Brueggers Bagels may need to cure any defaults of the tenant and deposit funds into an escrow account. However, if the landlord cannot legally deliver possession within three months, Brueggers Bagels can rescind its election to acquire the lease and have its escrowed funds returned.