Under what condition are liquidated damages payable to Brueggers Bagels?
Brueggers_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee (Note 1) | Amount | Date Due | Remarks |
|---|---|---|---|
| Additional and Replacement Certified Manager Personnel Training | $1,600 under the Franchise Agreement, and $850 under the License Agreement, for each additional individual to be trained Our personnel's wages, per diem charges, and travel, hotel, and living expenses under the License Agreement. | Before training begins | We will provide training for two Certified Managers (defined in Item 12 below); If you want to send additional individuals to the Certified Manager initial training program, the training fee will be $850 (for Licensed Bakeries) and $1,600 (for Franchised Bakeries) for each additional individual to be trained |
| Enforcement Expenses | Our reasonable costs, including attorney's fees, incurred as a result of your default | Upon demand | Payable if we terminate the franchise based on your default or if we have to take any action to enforce your post-termination obligations |
| Liquidated Damages | 3 years' worth of projected royalty fees | Upon demand | Payable if we terminate the Franchise Agreement based on your default. |
Source: Item 6 — OTHER FEES (FDD pages 13–18)
What This Means (2025 FDD)
According to Brueggers Bagels's 2025 Franchise Disclosure Document, liquidated damages are payable if Brueggers Bagels terminates the Franchise Agreement based on the franchisee's default. The amount of these damages is equivalent to three years' worth of projected royalty fees. This payment is due upon demand from Brueggers Bagels.
Liquidated damages clauses are common in franchise agreements to compensate the franchisor for the anticipated future royalties they lose when a franchise is terminated early due to the franchisee's breach. Calculating damages this way provides a degree of certainty and avoids the need for protracted legal battles to determine the exact amount of loss.
For a prospective Brueggers Bagels franchisee, this means that failing to meet the obligations outlined in the Franchise Agreement could result in a significant financial penalty in addition to the loss of the franchise itself. It is important to understand what constitutes a default under the agreement and to have a plan for addressing any potential issues that could lead to termination.