Upon termination or expiration of the Brueggers Bagels franchise agreement, what options does Brueggers Bagels have regarding the franchisee's lease or sublease for the premises?
Brueggers_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
Alternatively, in the event of a termination or expiration of the
Franchise Agreement, Franchisor may elect to enter into a new lease with the Landlord containing terms and conditions no less favorable than the Lease. Upon the Landlord's receipt of written notice from Franchisor advising the Landlord that Franchisor elects to enter into a new lease, the Landlord shall execute and deliver such new lease to Franchisor for its acceptance. Notwithstanding anything set forth in this Agreement to the contrary, in the event of (i) the assignment of the Lease by Tenant to Franchisor, or (ii) the election by Franchisor to enter into a new lease in the manner set forth herein above, or (iii) the subsequent assignment of the existing lease or new lease to any franchisor, franchisee or developer of a bakery café operating under the Tradename pursuant to Paragraph 4 herein, this Agreement shall survive and remain in effect. The Landlord and the Tenant shall deliver possession of the Leased Premises to Franchisor, free and clear of all rights of the Tenant or third parties, subject to Franchisor's curing any defaults of the Tenant, under the Lease, and executing an acceptance of the assignment of Lease or the new lease, as the case may be. In the event that Tenant has breached the Franchise Agreement, Franchisor is terminating Tenant's rights thereunder or the Franchise Agreement has expired, and in either case Franchisor desires to have the Tenant's leasehold interest under the Lease assigned to it, then Franchisor shall give notice thereof to Landlord and Tenant upon which Tenant's rights under the Lease shall be deemed, automatically without any further documentation, assigned to Franchisor effective the date of Franchisor's notice. Notwithstanding such assignment, Tenant shall remain liable for any obligations under the Lease. Upon receiving such notice from Franchisor, Landlord further consents, if such consent is necessary, to Franchisor's use of Tenant's personal property located in the Premises, however such consent does not grant Franchisor any right to do so.
Source: Item 22 — CONTRACTS (FDD page 61)
What This Means (2025 FDD)
According to Brueggers Bagels's 2025 Franchise Disclosure Document, in the event of termination or expiration of the Franchise Agreement, Brueggers Bagels has the option to enter into a new lease with the Landlord. The terms and conditions of this new lease would be no less favorable than the original lease. To initiate this, Brueggers Bagels must provide written notice to the Landlord, who then must execute and deliver the new lease for Brueggers Bagels's acceptance.
In the event that the franchisee has breached the Franchise Agreement, Brueggers Bagels is terminating the franchisee's rights, or the Franchise Agreement has expired, Brueggers Bagels can request the assignment of the franchisee's leasehold interest. To do so, Brueggers Bagels must notify both the Landlord and the franchisee. Upon this notice, the franchisee's rights under the lease are automatically assigned to Brueggers Bagels without further documentation, effective from the date of Brueggers Bagels's notice. Despite this assignment, the franchisee remains liable for any obligations under the lease.
Upon receiving notice from Brueggers Bagels, the Landlord consents to Brueggers Bagels's use of the franchisee's personal property located on the premises, if such consent is necessary. However, this consent does not grant Brueggers Bagels any specific rights to that personal property. Brueggers Bagels can also ensure that the Landlord and the Tenant deliver possession of the Leased Premises to Franchisor, free and clear of all rights of the Tenant or third parties, subject to Franchisor's curing any defaults of the Tenant, under the Lease, and executing an acceptance of the assignment of Lease or the new lease, as the case may be.
This clause protects Brueggers Bagels by ensuring they have options to maintain control of the location and continue operations, even if a franchisee is terminated or the agreement expires. However, the franchisee should be aware that they may still be liable for obligations under the lease even after assignment to Brueggers Bagels.