Are there exceptions to the restriction on Brueggers Bagels establishing or franchising other Bakeries within the Protected Area?

According to Brueggers Bagels's 2025 Franchise Disclosure Document, while the Franchise Agreement provides a Protected Area, there are several exceptions to the restrictions on Brueggers Bagels establishing or franchising other bakeries within that area. These exceptions significantly impact the exclusivity a franchisee might expect. Specifically, the restriction on bakeries of the same type does not apply to Bruegger's outlets at Co-Branded Locations or Licensed Bakeries at non-traditional facilities. Furthermore, the company can still engage in sales of Bruegger's products through other channels of distribution. They can also sell Bruegger's-branded products or similar products and services through other brands that they or their affiliates control or may acquire within the Protected Area. This means that even within a franchisee's Protected Area, Brueggers Bagels can operate or franchise other outlets under different arrangements or brands.

The FDD also clarifies that Brueggers Bagels and its affiliates reserve all rights not expressly granted to the franchisee regarding the Development Area and/or Protected Area. This includes the right to operate and franchise Bruegger's outlets at Co-Branded Locations and Licensed Bakeries at Non-Traditional Facilities. Additionally, Brueggers Bagels and its affiliates can establish restaurants or other food service units selling the same or similar products or services but using different trademarks and service marks. The document explicitly mentions that affiliates operate and franchise businesses under other trademarks that sell similar products, such as baked goods, coffee, soups, and salads, and these outlets could exist or be established in the franchisee's Development Area or Protected Area.

Moreover, Brueggers Bagels and its affiliates can offer and sell Bruegger's-branded products or similar products through any other distribution channel, such as the Internet, catalog sales, telemarketing, mobile networks, other direct marketing, outlets of affiliated brands, wholesale distributors, supermarkets, and other retail outlets. The company can also authorize any of its franchisees or licensees to do these things without any obligation to compensate the franchisee. This broad reservation of rights and the ability to utilize alternative channels of distribution can significantly dilute the value of the Protected Area for a Brueggers Bagels franchisee.

The document also highlights that ENC operates restaurants under the "Noah's New York Bagels" marks, and EBBFC owns, operates, and franchises restaurants under the "Einstein Bros." marks, which offer similar products. Despite any other agreements, franchisees have no rights regarding any other business that Brueggers Bagels (or its affiliates) operate, including operations under the Noah's New York Bagels, Manhattan Bagel and Einstein Bros. brands, or any brands that JAB's affiliates operate, such as "Caribou Coffee", "Peet's Coffee", "Café do Ponto", "Casa Pilao", "Baresso", "Krispy Kreme", "Panera Bread", and "Pret A Manger". This means that Brueggers Bagels and its affiliates have the right to operate and license others to operate businesses under these Other Brands at any location, even within the franchisee's Protected Area, and are not obligated to resolve conflicts regarding territory, customers, and franchisor support.