Does Brueggers Bagels require consent to own an interest in a competing business during the term of the Franchise Agreement?
Brueggers_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
During the term of the Franchise Agreement and for as long as you have any legal or beneficial ownership interest in Franchisee, 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.
For a period of one (1) year after the expiration or termination of the Franchise Agreement or the approved transfer of the Bakery to a new owner, you will not directly or indirectly own, maintain, operate, engage in, be employed by, provide assistance to, or have any interest in any Competing Business which is, or is intended to be, located within ten (10) miles of the
Premises or within five (5) miles of any other Bruegger's Bakery, except for any business operated pursuant to a valid franchise agreement or license agreement with us or one of our affiliates, or as we otherwise approve in writing. If you fail or refuse to abide by any of the foregoing restrictions and BFC obtains enforcement in a judicial or arbitration proceeding, the obligations under the breached restriction will continue in effect for one (1) year after the date you begin to comply with the order enforcing the restriction.
Source: Item 22 — CONTRACTS (FDD page 61)
What This Means (2025 FDD)
According to Brueggers Bagels's 2025 Franchise Disclosure Document, during the term of the Franchise Agreement, franchisees need Brueggers Bagels's consent to own an interest in a competing business. This consent can be withheld at Brueggers Bagels's discretion. This restriction applies as long as the franchisee has any legal or beneficial ownership interest in the Brueggers Bagels franchise. The restriction extends to direct or indirect ownership, such as through affiliates or family members.
This requirement means that while operating a Brueggers Bagels franchise, franchisees cannot own, operate, or be involved with any competing business without explicit permission from Brueggers Bagels. A "Competing Business" is not defined in the provided excerpts. This condition is in place to protect Brueggers Bagels's market position and prevent franchisees from using knowledge or resources gained from the franchise to benefit a competing venture.
After the Franchise Agreement expires or is terminated, or if the bakery is transferred to a new owner, a different set of restrictions applies. For one year following the end of the agreement, the franchisee cannot be involved with any competing business within ten miles of the Brueggers Bagels location or within five miles of any other Brueggers Bagels restaurant. This post-term restriction does not apply if the competing business is operated under a valid franchise or license agreement with Brueggers Bagels or if Brueggers Bagels provides written approval. If a franchisee violates these restrictions, the one-year restriction will be extended to begin from the date of compliance with any enforcement order obtained by Brueggers Bagels.