B57/100FDD 2024
Bruegger’s Bagels — Litigation & Risk
Food & Beverage - Quick Service · FDD Items 3, 4 & 5
Lower Risk
No litigation cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
0
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
57 / 100
FranchiseVerdict composite
Rating
MODERATE
STRONG / MODERATE / CAUTION / AVOID
7(a) FOIA data · FY2020–present
SBA Loan Performance
Aggregated from public SBA 7(a) loan disclosures. Default rate is the share of loans that were charged off or settled for less than the full balance.
Total 7(a) loans
23
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted
FDD Items 5, 6 & 17 — what you give up
Contract Risk Indicators
Mandatory arbitration
Not required
You retain the right to sue in court
Jury trial waiver
Waived
You give up the right to a jury trial
Non-compete
1 yrs
Post-termination restriction on similar businesses
Franchisor can compete
Yes
Franchisor can open competing locations in or near your territory
Right of first refusal
Yes
Franchisor can match any purchase offer when you try to sell
Governing law
Colorado
State whose law governs disputes — relevant if you're not based there
What drove the 57/100 rating
Risk Score Breakdown
- 01MINORSystem contracting sharply: 181 units down 5.8% YoY indicates declining franchisee success and network confidence
- 02MINORNo Item 19 financial disclosure: Franchisor refuses to provide average unit volumes or net income, preventing ROI validation
- 03MEDHigh initial investment with opaque returns: $693,800–$1.2M+ required with no disclosed profitability benchmarks creates significant capital-at-risk scenario
- 04HIGHGoing Concern = False is ambiguous: Unclear whether franchisor itself has financial stability concerns
- 05MINORModest 5% royalty masks unit economics: Without revenue/profit data, impossible to model actual franchisee cash flow and breakeven timeline
- 06MINORQuick-service food model inherently labor-intensive: Bagel shops face persistent wage inflation, commodity cost volatility, and thin margins typical of QSR
Severity inferred from FDD text — not a regulatory or legal classification
Litigation data from FDD Items 3, 4, and 5. SBA data from public 7(a) FOIA records (FY2020–present). Not legal advice — consult a franchise attorney before signing any franchise agreement.