What is the weekly Marketing Contribution based on for a Brueggers Bagels Bakery?
Brueggers_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
Under the Franchise Agreement, you have a required weekly Marketing Contribution equal to 3.5% of the Gross Sales of your Bakery during the preceding Accounting Week. Franchisees who entered the Bruegger's system before you (or who enter after you) may have different obligations, depending on their form of Franchise Agreement. There is no required Marketing Contribution under the License Agreement.
We have the right to allocate your Marketing Contribution in the proportion that we designate among the following: (a) the Systemwide Marketing Fund ("SMF"); (b) any Marketing Co-op we establish for your area (but we are not required to establish a Marketing Co-op for any area); and (c) local store marketing ("LSM"). Although likely to change, we presently allocate the Marketing Contribution as follows:
- We collect 50% of the Marketing Contribution (that is, 1.75% of your Gross Sales) for the SMF; and
- You must spend 50% of the Marketing Contribution (that is, 1.75% of your Gross Sales) on LSM.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, MANUALS AND TRAINING (FDD pages 32–42)
What This Means (2025 FDD)
According to Brueggers Bagels's 2025 Franchise Disclosure Document, franchisees are required to make a weekly Marketing Contribution. This contribution is equal to 3.5% of the Gross Sales of the Bakery during the preceding Accounting Week. However, the document notes that franchisees who entered the Brueggers Bagels system before or after the current franchisee may have different obligations based on their specific Franchise Agreement.
The Marketing Contribution is allocated at the discretion of Brueggers Bagels among three potential uses: the Systemwide Marketing Fund (SMF), any Marketing Co-op established for the franchisee's area, and local store marketing (LSM). Currently, the allocation is split evenly, with 50% (1.75% of Gross Sales) going to the SMF and the other 50% (1.75% of Gross Sales) being required for the franchisee to spend on LSM.
The SMF is used for advertising and promotion of Brueggers Bagels Bakeries. It's important to note that while franchisees contribute to the SMF, Company-owned Bakeries are not contractually obligated to do so, and the current policy is that they do not contribute. This means that franchisees are subsidizing marketing efforts that may also benefit corporate locations. The franchisee is obligated to spend the other half of the marketing contribution on local store marketing. Brueggers Bagels retains the right to collect and hold these LSM funds, directing their expenditure if the franchisee does not provide timely guidance. This gives Brueggers Bagels significant control over marketing efforts and spending, even at the local level.