Does Brueggers Bagels have the right to require trainees to sign a confidentiality and non-competition agreement?
Brueggers_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
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's 2025 Franchise Disclosure Document, the Franchise Agreement necessitates 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 obligations, restrictions on ownership changes, and dispute resolution provisions. This requirement ensures that all individuals with a vested interest in the Brueggers Bagels franchise are committed to upholding the terms of the agreement.
Furthermore, if a business entity enters into the agreement, all individuals holding a legal or beneficial ownership interest in that entity must also execute the Confidentiality and Non-Competition Agreement. In community property states, Brueggers Bagels may also require the spouse of the owner to sign the agreement. This measure aims to protect Brueggers Bagels's confidential information and trade secrets by ensuring that all parties with access to this information are legally bound to maintain its confidentiality and refrain from competitive activities.
As a prospective Brueggers Bagels franchisee, it is essential to understand that by investing in a Brueggers Bagels franchise, you and any other individuals with ownership interests will be required to sign a Confidentiality and Non-Competition Agreement. This agreement restricts the use of confidential information in any other business or capacity and requires best efforts to maintain the confidentiality of the information. Upon ceasing to have an interest in the franchise, all confidential information in your possession or control must be returned to Brueggers Bagels.