Under what circumstances will a Brueggers Bagels franchise agreement automatically terminate without notice?
Brueggers_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
17. DEFAULT AND TERMINATION
The terms and conditions regarding default and termination contained herein shall be subject to any applicable state statutes or regulations regarding the termination of a franchise.
- 17.1. Automatic Termination Without Notice.
You will be deemed to be in default under this Agreement, and all rights granted to you herein will automatically terminate without notice to you, if you become insolvent or make a general assignment for the benefit of creditors; if you file a petition in bankruptcy or a petition is filed against you and not opposed by you; if you are adjudicated as bankrupt or insolvent; if a bill in equity or other proceeding for the appointment of a receiver or other custodian for your business or assets is filed and consented to by you; if a receiver or other custodian (permanent or temporary) of your assets or property, or any part thereof, is appointed by any court of competent jurisdiction; if proceedings for a composition with creditors under any state or federal law are instituted by or against you; if a final judgment against you remains unsatisfied or of record for thirty (30) days or longer (unless supersedeas bond is filed); if your company is dissolved; if execution is levied against your business or property; if a suit to foreclose any lien or mortgage against you, the Premises or equipment of the Bakery is instituted and not dismissed within thirty (30) days or if you enter into any agreement that is in lieu of such foreclosure; or if the real or personal property of the Bakery is sold after levy thereupon by any sheriff, marshal, or constable.
Source: Item 22 — CONTRACTS (FDD page 61)
What This Means (2025 FDD)
According to Brueggers Bagels's 2025 Franchise Disclosure Document, the franchise agreement can be automatically terminated without notice under specific financial and legal circumstances. These include scenarios where the franchisee becomes insolvent, makes an assignment for the benefit of creditors, files a bankruptcy petition (or does not oppose one filed against them), or is adjudicated bankrupt or insolvent.
Additionally, automatic termination occurs if a bill in equity is filed for the appointment of a receiver for the franchisee's business or assets with the franchisee's consent, or if a receiver is appointed by a court. The agreement also terminates automatically if proceedings for composition with creditors are instituted by or against the franchisee, if a final judgment against the franchisee remains unsatisfied for 30 days or longer (unless a supersedeas bond is filed), if the franchisee's company is dissolved, or if execution is levied against the business or property.
Further conditions leading to automatic termination without notice include the institution of a suit to foreclose any lien or mortgage against the franchisee, the premises, or the bakery's equipment that is not dismissed within 30 days, or entering into any agreement in lieu of such foreclosure. Finally, the sale of the real or personal property of the bakery after levy by a sheriff, marshal, or constable also results in automatic termination. These terms are subject to any applicable state statutes or regulations regarding franchise termination.