Under what conditions can the Brueggers Bagels franchise agreement be automatically terminated 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 the 2025 Brueggers Bagels Franchise Disclosure Document, the franchise agreement can be automatically terminated without notice under specific financial and legal distress scenarios. These include situations where the franchisee becomes insolvent, makes an assignment for the benefit of creditors, files for bankruptcy (or does not oppose an involuntary petition), 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 assets and the franchisee consents, or if a receiver is appointed by a court. Proceedings for composition with creditors, an unsatisfied final judgment for 30 days or longer (unless a supersedeas bond is filed), dissolution of the franchisee's company, or execution levied against the business or property also trigger automatic termination.
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 equipment that is not dismissed within 30 days, entering into an agreement in lieu of foreclosure, or the sale of the bakery's real or personal property after levy by a sheriff, marshal, or constable. These terms are subject to any applicable state statutes or regulations regarding the termination of a franchise.