After Brueggers Bagels transfers the Franchise Agreement, will they still be liable for their obligations?
Brueggers_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
16.5.1. That all of your accrued monetary obligations and all other outstanding obligations to us and our affiliates have been satisfied;
16.5.2. That you are not in default of any provision of this Agreement, any amendment hereof or successor hereto, or any other agreement between you and us or our affiliates;
16.5.3. That the transferor executes a general release, in a form satisfactory to us, of any and all claims against us, our affiliates and their respective past, present, and future officers, directors, shareholders, and employees, in their corporate and individual capacities;
16.5.4. That the transferee (and if the transferee is a corporation, partnership, or limited liability company, such owners of a beneficial interest in the transferee as we may request) enter into a written assignment, in a form satisfactory to us, assuming and agreeing to discharge all of your obligations under this Agreement; or, at our option, enter into our then current form of Franchise Agreement; and, if the transferor guaranteed your obligations under this Agreement, that the transferee guarantee the performance of all such obligations in writing in a form satisfactory to us;
Source: Item 22 — CONTRACTS (FDD page 61)
What This Means (2025 FDD)
According to the 2025 Brueggers Bagels Franchise Disclosure Document, if a franchisee transfers their Franchise Agreement, certain conditions must be met to ensure the transfer is approved. These conditions protect Brueggers Bagels and maintain the integrity of the franchise system.
Specifically, the transferor (the franchisee selling their business) must satisfy all outstanding monetary and other obligations to Brueggers Bagels and its affiliates. They cannot be in default of any agreement with Brueggers Bagels. Additionally, the transferor must execute a general release, in a form satisfactory to Brueggers Bagels, releasing any claims against Brueggers Bagels, its affiliates, and their respective officers, directors, shareholders, and employees.
Furthermore, the transferee (the buyer) must enter into a written assignment, agreeing to take on all of the transferor's obligations under the Franchise Agreement. Brueggers Bagels also has the option to require the transferee to enter into the then-current form of the Franchise Agreement. If the transferor had guaranteed their obligations, the transferee must also provide a written guarantee in a form satisfactory to Brueggers Bagels. Meeting these conditions ensures a smooth transition and protects Brueggers Bagels' interests, while also ensuring the new franchisee is fully committed to the agreement.