What is the required weekly Marketing Contribution for a Brueggers Bagels franchisee?
Brueggers_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
Under the Franchise Agreement, you have a required weekly Marketing Contribution equal to 3.5% of the Gross Sales of your Bakery during the preceding Accounting Week. Franchisees who entered the Bruegger's system before you (or who enter after you) may have different obligations, depending on their form of Franchise Agreement. There is no required Marketing Contribution under the License Agreement.
We have the right to allocate your Marketing Contribution in the proportion that we designate among the following: (a) the Systemwide Marketing Fund ("SMF"); (b) any Marketing Co-op we establish for your area (but we are not required to establish a Marketing Co-op for any area); and (c) local store marketing ("LSM"). Although likely to change, we presently allocate the Marketing Contribution as follows:
- We collect 50% of the Marketing Contribution (that is, 1.75% of your Gross Sales) for the SMF; and
- You must spend 50% of the Marketing Contribution (that is, 1.75% of your Gross Sales) on LSM.
SMF. The SMF is a common fund for the advertising and promotion of Bruegger's Bakeries. There is no contractual obligation for Company-owned Bakeries to contribute to the SMF. Company-owned Bakeries have contributed at times in the past, but our current policy is that they do not contribute.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, MANUALS AND TRAINING (FDD pages 32–42)
What This Means (2025 FDD)
According to Brueggers Bagels's 2025 Franchise Disclosure Document, franchisees are required to make a weekly Marketing Contribution. This contribution is equal to 3.5% of the Gross Sales of the bakery during the preceding Accounting Week. However, the FDD notes that franchisees who entered the Brueggers Bagels system before or after the current franchisee may have different obligations based on their specific Franchise Agreement.
The Marketing Contribution is allocated by Brueggers Bagels, with the current allocation directing 50% of the contribution (1.75% of Gross Sales) to the Systemwide Marketing Fund (SMF). The other 50% (1.75% of Gross Sales) must be spent by the franchisee on local store marketing (LSM).
The Systemwide Marketing Fund is used for advertising and promotion of Brueggers Bagels bakeries. It's important to note that while franchisees must contribute to the SMF, company-owned bakeries do not have a contractual obligation to do so, and currently, they do not contribute. This means that the SMF is primarily funded by franchisees, and its use is determined by Brueggers Bagels. Franchisees should be aware of these contribution requirements and how the funds are allocated, as it impacts their overall operating costs and marketing strategies.