Under what conditions can Brueggers Bagels withhold consent for a franchise transfer?
Brueggers_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
During the term of the Franchise Agreement and for as long as you have any legal or beneficial ownership interest in Franchisee, you agree that you will not, without BFC's consent (which consent may be withheld at BFC's discretion) directly or indirectly (such as through an Affiliate or family members) own any legal or beneficial interest in, or render services or give advice in connection with: (a) any Competing Business located anywhere; or (b) any entity located anywhere that grants franchises or licenses interests to others to operate any Competing Business.
Source: Item 22 — CONTRACTS (FDD page 61)
What This Means (2025 FDD)
According to Brueggers Bagels' 2025 Franchise Disclosure Document, Brueggers Franchise Corporation (BFC) has the discretion to withhold consent for a franchise transfer under certain conditions. Specifically, during the term of the License or Franchise Agreement, and as long as the franchisee has any legal or beneficial ownership interest in the franchise, they cannot directly or indirectly (including through affiliates or family members) own any interest in, provide services to, or advise any Competing Business or any entity that franchises or licenses interests to operate a Competing Business, without BFC's consent. This consent can be withheld at BFC's discretion.
This provision means that a Brueggers Bagels franchisee's ability to transfer their franchise is contingent upon their adherence to non-compete obligations during the term of the agreement and while they maintain an ownership stake. If a franchisee violates these non-compete terms, Brueggers Bagels can withhold consent for the transfer. This is a fairly standard practice in franchising, designed to protect the brand and prevent franchisees from using their knowledge and experience gained from the franchise to benefit a competing business.
Furthermore, for one year after the expiration or termination of the Franchise Agreement or the approved transfer of the Bakery to a new owner, the franchisee is restricted from involvement with any Competing Business within ten miles of the Premises or five miles of any other Bruegger's Bakery, unless approved in writing by Brueggers Bagels or operated under a valid agreement with them. Failure to comply with these restrictions can lead to enforcement actions, potentially extending the restriction period by one year from the date of compliance with the enforcement order. This highlights the importance of understanding and adhering to the non-compete clauses in the franchise agreement to ensure a smooth transfer process and avoid legal complications.