After Brueggers Bagels transfers the Franchise Agreement, will they still be liable for obligations under the agreement?
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 Brueggers Bagels's 2025 Franchise Disclosure Document, a transferor (the original franchisee) seeking to transfer their Franchise Agreement must meet several conditions to be released from their obligations. These conditions ensure that Brueggers Bagels maintains its standards and protects its interests.
Specifically, the transferor must satisfy all accrued monetary and outstanding obligations to Brueggers Bagels and its affiliates. They cannot be in default of any provision within the Franchise Agreement or any other 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 new franchisee) must enter into a written assignment, acceptable to Brueggers Bagels, agreeing to fulfill all obligations under the Franchise Agreement. Alternatively, at Brueggers Bagels's discretion, the transferee may enter into the then-current form of the Franchise Agreement. If the transferor had guaranteed obligations, the transferee must also provide a written guarantee in a form satisfactory to Brueggers Bagels. Only after meeting these conditions and Brueggers Bagels approving the transfer, would the transferor likely be released from further liability under the agreement.