During the term of the Franchise Agreement, what is a prohibited action regarding competing businesses for someone with an ownership interest in a Brueggers Bagels franchise?
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, if you have a legal or beneficial ownership interest in the Brueggers Bagels franchise, you are prohibited from owning any legal or beneficial interest in, rendering services, or giving advice in connection with any Competing Business located anywhere, or any entity that grants franchises or licenses to others to operate any Competing Business. This is without Bruegger's Franchise Corporation's consent, which they may withhold at their discretion. This restriction applies whether the ownership is direct or indirect, such as through an affiliate or family members.
This non-compete clause is standard in franchising to protect the brand and its market share. The definition of "Competing Business" is critical for a prospective franchisee to understand. It is important to note that this restriction is in place for as long as you have any legal or beneficial ownership in the Brueggers Bagels franchise.
After the expiration or termination of the Franchise Agreement, or the approved transfer of the Bakery to a new owner, a different set of restrictions apply for a period of one year. During this one-year period, you cannot be involved with a Competing Business within ten miles of the Brueggers Bagels location or within five miles of any other Brueggers Bagels restaurant, unless it's a business operated under a valid franchise agreement with Brueggers Bagels or approved in writing by them. If a franchisee fails to comply with these restrictions and Brueggers Bagels pursues legal action, the restrictions will remain in effect for one year after the franchisee begins to comply with the court order.