Under what conditions can Brueggers Bagels refuse to permit a transfer of ownership of a franchise in Michigan?
Brueggers_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
- (g) A provision which permits a franchisor to refuse to permit a transfer of ownership of a franchise, except for good cause.
This subdivision does not prevent a franchisor from exercising a right of first refusal to purchase the franchise.
Good cause shall include, but is not limited to:
- (i) The failure of the proposed transferee to meet the franchisor's then current reasonable qualifications or standards.
- (ii) The fact that the proposed transferee is a competitor of the franchisor or subfranchisor.
- (iii) The unwillingness of the proposed transferee to agree in writing to comply with all lawful obligations.
- (iv) The failure of the franchisee or proposed transferee to pay any sums owing to the franchisor or to cure any default in the franchise agreement existing at the time of the proposed transfer.
Source: Item 23 — RECEIPTS (FDD pages 61–335)
What This Means (2025 FDD)
According to the 2025 Brueggers Bagels Franchise Disclosure Document, Michigan law stipulates specific conditions under which Brueggers Bagels can refuse a franchise transfer. These conditions are considered "good cause" and protect the franchisor's interests while ensuring fair practices.
Brueggers Bagels may refuse a transfer if the proposed transferee does not meet the brand's current reasonable qualifications or standards. This ensures that any new franchisee has the skills and resources necessary to successfully operate the franchise. A transfer can also be denied if the proposed transferee is a competitor of Brueggers Bagels, preventing potential conflicts of interest and protecting proprietary information.
Additionally, Brueggers Bagels can refuse a transfer if the proposed transferee is unwilling to agree in writing to comply with all lawful obligations under the franchise agreement. This ensures that the new franchisee is committed to upholding the terms and conditions of the franchise. Finally, a transfer may be denied if the current franchisee or the proposed transferee has outstanding payments due to Brueggers Bagels or has failed to cure any existing default in the franchise agreement at the time of the proposed transfer. This protects Brueggers Bagels from financial losses and ensures that all obligations are met before a transfer is approved.
It is important to note that Michigan law does not prevent Brueggers Bagels from exercising a right of first refusal to purchase the franchise, allowing them to maintain control over the franchise's ownership and operation.