Can Brueggers Bagels require trainees to execute a personal covenant of confidentiality and non-competition?
Brueggers_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 22: CONTRACTS]
Franchisee owns and operates, or is developing, a Bruegger's restaurant pursuant to a Franchise Agreement (the "Franchise Agreement") with Bruegger's Franchise Corporation ("BFC").
The Franchise Agreement requires persons with legal or beneficial ownership interests in Franchisee to be personally bound by Franchisee's obligations under the Franchise Agreement, including restrictions on competition, confidentiality obligations, restrictions on ownership changes, and dispute resolution provisions.
All capitalized terms used in this document have the same meaning as in the Franchise Agreement.
You own or intend to own a legal or beneficial ownership interest in Franchisee.
You acknowledge and agree that: (a) your execution of this Agreement is a condition of acquiring and holding your ownership interest in the Franchisee, and (b) you have received good and valuable consideration for executing this Agreement.
BFC may enforce this Agreement directly against you.
If a business entity signs this Agreement, all persons who have a legal or beneficial ownership interest in that business entity must also execute this Agreement and if your owners reside in a community property state we may require their spouse to execute this Confidentiality and Non-Competition Agreement.
You may gain access to confidential information and trade secrets of BFC and its affiliates as a result of investing in Franchisee.
You agree that while you have a legal or beneficial ownership interest in Franchisee and thereafter you: (a) will not use the confidential information in any other business or capacity (such use being an unfair method of competition); (b) will exert best efforts to maintain the confidentiality of the confidential information; and (c) will not make unauthorized copies of any portion of the confidential information disclosed in written, electronic or other form.
If you cease to have an interest in Franchisee, you must deliver to BFC any such confidential information in your possession or control.
Source: Item 22 — CONTRACTS (FDD page 61)
What This Means (2025 FDD)
According to Brueggers Bagels' 2025 Franchise Disclosure Document, the franchise agreement mandates that individuals with legal or beneficial ownership interests in the franchisee are personally bound by the franchisee's obligations. These obligations encompass restrictions on competition, confidentiality, ownership changes, and dispute resolution. This requirement extends to all persons holding a legal or beneficial ownership interest in a business entity that signs the agreement. Furthermore, if these owners reside in a community property state, Brueggers Bagels may also require their spouse to sign a Confidentiality and Non-Competition Agreement.
This agreement is a prerequisite for acquiring and maintaining an ownership stake in the franchise. Brueggers Bagels retains the right to directly enforce this agreement against the individual owner. By signing, owners acknowledge that they may gain access to confidential information and trade secrets belonging to Brueggers Bagels and its affiliates.
Consequently, owners are obligated to protect this information both during their ownership and afterward. They must not use the confidential information in any other business or capacity, as such use would be considered unfair competition. Additionally, they must make their best efforts to maintain the confidentiality of the information and refrain from making unauthorized copies. Upon ceasing to have an interest in the franchise, all confidential information in their possession or control must be returned to Brueggers Bagels. This ensures the protection of Brueggers Bagels' proprietary information and competitive advantage.