Is Brueggers Bagels required to provide advertising and promotional materials produced with their own funds to franchisees?
Brueggers_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
We may use the SMF to pay various costs and expenses as we determine in our sole discretion, including, without limitation: preparation and production of video, audio, written, online and mobile advertising materials; production of promotional materials; sponsorship of sporting, charitable, or similar events; design, establishment, and maintenance of web sites, search rankings, social media profiles and other online and mobile presence; endorsement contracts; reasonable salaries and expenses of our and our affiliates' employees who work 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 that we or our affiliates incur 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, without limitation, purchasing direct mail and other 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.
- 14.4.2. We will seek the advice of Bruegger's franchisees by formal or informal means with respect to the creative concepts and media used for programs financed by the SMF.
We retain the final authority on all programs financed by the SMF.
We have the right to change or dissolve the SMF.
- 14.4.3. You acknowledge that the SMF and any earnings thereon will be used to maximize general public recognition, acceptance, and patronage of Bruegger's outlets, and that we are not obligated, in administering the SMF, to make expenditures for you which are equivalent or proportional to your contribution, or to ensure that any particular franchisee benefits directly or pro rata from expenditures by the SMF.
Your failure to derive any such benefit will not serve as a basis for a reduction or elimination of your obligation to contribute to the SMF.
Source: Item 22 — CONTRACTS (FDD page 61)
What This Means (2025 FDD)
According to Brueggers Bagels's 2025 Franchise Disclosure Document, Brueggers Bagels uses the SMF (presumably, Standard Marketing Fund) to cover various advertising and promotional expenses. These expenses include the preparation and production of video, audio, written, online, and mobile advertising materials, as well as the production of promotional materials. Brueggers Bagels also uses the SMF for sponsoring events, maintaining websites and social media, securing endorsement contracts, and covering salaries and expenses for employees working on advertising and marketing.
Brueggers Bagels seeks advice from franchisees regarding the creative concepts and media used for programs financed by the SMF, but retains final authority over all programs. Franchisees acknowledge that the SMF aims to maximize general public recognition and patronage of Brueggers Bagels outlets. Brueggers Bagels is not obligated to make expenditures for individual franchisees equivalent to their contributions or ensure that any franchisee benefits directly or proportionally from the SMF expenditures.
In practical terms, this means that while Brueggers Bagels franchisees contribute to the SMF, they do not have direct control over how the funds are spent. The franchisor decides how to allocate the funds to maximize brand recognition and patronage across all Brueggers Bagels locations. Franchisees are not guaranteed to receive direct benefits from the SMF expenditures in their specific location. This arrangement is fairly typical in franchising, where marketing funds are used for the collective benefit of the brand rather than individual franchisee promotion.
Therefore, Brueggers Bagels is not required to provide advertising and promotional materials directly to franchisees using their own funds. Instead, these materials are produced and distributed using the SMF, which is funded by franchisee contributions and managed at the discretion of Brueggers Bagels. Franchisees should be aware that their contributions to the SMF may not result in direct or proportional benefits to their individual business.