After termination of the Brueggers Bagels franchise agreement, what sums must be paid to Brueggers Bagels and its affiliates?
Brueggers_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
You must not use any designation of origin or description or representation which, in our sole discretion, falsely suggests or represents an association or connection with us.
- 10.1.6. Promptly pay all sums owing to us and our affiliates. In the event of termination for your default, the sums will include all damages, costs, and expenses incurred by us as a result of the default, including, but not limited to, reasonable attorneys' fees. You will have no right to a refund of all or any part of the Development Fee, regardless of whether you entered into a Franchise Agreement prior to such termination. We will retain all amounts paid to us pursuant to the terms of this Agreement.
- 10.1.7. Comply with all obligations that expressly or by their nature survive termination of this Agreement, including the restrictions on competition contained in Section 11.2. No right or remedy herein conferred upon or reserved to us is exclusive of any other right or remedy provided or permitted to us by law or in equity.
- 10.2. Continuing Obligations. After termination, or expiration, of this Agreement under any circumstances, you will remain liable to us for certain obligations. Among other things, you must:
- 10.2.1. Promptly pay all sums owing to us and our affiliates;
- 10.2.2. Permit access to, and examination of your books and records relating to the development of the Bakeries:
- 10.2.3. Protect our confidential information as provided in Section 7;
- 10.2.4. Not make any statements about us or any of our franchisees or affiliates that may constitute trade disparagement;
- 10.2.5. Comply with the post-term restrictions on competition in Section 11;
- 10.2.6. Indemnify us with respect to the period through the effective date of expiration or termination as provided in Section 14; and
- 10.2.7. Pay us all damages, costs, and expenses (including, but not limited to, reasonable attorneys' fees) we incur in obtaining injunctive, declaratory, or other relief to enforce this Section 10.
Source: Item 22 — CONTRACTS (FDD page 61)
What This Means (2025 FDD)
According to the 2025 Brueggers Bagels Franchise Disclosure Document, upon termination of the franchise agreement, a franchisee must promptly pay all sums owed to Brueggers Bagels and its affiliates. If the termination is due to the franchisee's default, these sums will also include all damages, costs, and expenses incurred by Brueggers Bagels as a result of the default. This includes, but is not limited to, reasonable attorneys' fees. The franchisee will not be entitled to a refund of any part of the Development Fee, regardless of whether a Franchise Agreement was entered into before the termination. Brueggers Bagels will retain all amounts paid under the terms of the agreement.
Furthermore, even after termination or expiration of the agreement, the franchisee remains liable to Brueggers Bagels for certain obligations. These include promptly paying all sums owed to Brueggers Bagels and its affiliates, allowing access to and examination of books and records related to the development of the Bakeries, protecting confidential information, refraining from making disparaging statements about Brueggers Bagels or its franchisees or affiliates, complying with post-term restrictions on competition, indemnifying Brueggers Bagels, and paying all damages, costs, and expenses (including reasonable attorneys' fees) incurred by Brueggers Bagels in enforcing these obligations.
In practical terms, this means that a Brueggers Bagels franchisee should be aware that termination of the franchise agreement, especially due to default, can result in significant financial obligations beyond the initial fees and investments. These obligations can include not only outstanding payments but also legal fees and damages incurred by Brueggers Bagels. The franchisee should also be aware of the continuing obligations that survive the termination of the agreement, such as maintaining confidentiality and adhering to non-compete restrictions, which can have long-term implications for their business activities.