BRUEGGERS BAGELS - FDD UFOC ITEM 1 Detail

THE FRANCHISOR AND ANY PARENTS, PREDECESSORS AND AFFILIATES

This disclosure document describes Bruegger''s franchises. In this disclosure document, "we," "us," "our" and "BFC means Bruegger''s Franchise Corporation, the franchisor, and "you" or "your" means the purchaser of the franchise. If the purchaser of the franchise is a corporation, partnership, or limited liability company, "you" means both the purchaser and the persons who own the entity. "Bakery-cafe" and "Kiosk" are as defined below.

BFC is a Delaware corporation, originally incorporated on March 11, 1992. We do business under the names Bruegger''s and Bruegger''s Bagels. Our principal place of business is at 159 Bank Street, Burlington, Vermont 05401 (802.660.4020). Exhibit K to this disclosure document lists our agents for service of process, to the extent that we have appointed agents in other states.

We offer the right to develop and operate Bakery-Cafes and Kiosks (collectively, "Bakeries") under the name and mark "Bruegger''s Bagels" and "Bruegger''s." The Bakeries offer freshly-baked bagels, baked goods, coffee, cream cheese, sandwiches, soups, salads and other food and beverage items to the public for carry-out and/or consumption on the premises. We have no business activities other than franchising the Bruegger''s concept. We began offering Bruegger''s franchises in March 1993. We have not offered franchises in any other line of business, and we have no affiliates that offer franchises in any line of business. We have no predecessor as franchisor of the Bruegger''s concept.

We are an indirect subsidiary of Bruegger''s Enterprises, Inc. ("BEI"). BEI is a Delaware corporation, formed on July 7, 2003. On August 6, 2003, BEI acquired substantially all of the assets of our former parent company, Bruegger''s Corporation. Bruegger''s Corporation''s principal business address was 159 Bank Street, Burlington, Vermont 05401. The purchased assets included Bruegger''s Corporation''s ownership interest in us and in several affiliates that were operating Bakeries and commissaries that supply Bakeries. BEI also acquired the trademarks, the recipes and manufacturing process for the dough, certain recipes for cream cheese, and other proprietary aspects of the Bruegger''s concept.

BEI now operates the Bakeries that were acquired in the August 2003 transaction. We refer to Bakeries operated by BEI as "Company-owned Bakeries." BEI also operates the commissaries that were acquired in August 2003, and in this capacity BEI may own commissaries that act as a supplier to you (see Item 8 and Exhibit D). BEI also owns and operates bagel bakeries under the trade name "Bagel Factory" exclusively in the Philadelphia, Pennsylvania market. BEI''s business address is the same as ours: 159 Bank Street, Burlington, Vermont 05401.

BEI is indirectly owned by our ultimate parent company, Sun Capital Partners, Inc. ("Sun Capital"). Sun Capital''s address is 5200 Town Center Circle, Suite 600, Boca Raton, Florida 33486. Through Sun Capital, we have several affiliates that offer franchises. Sun Capital owns a controlling interest in the following franchisor companies:

The Bruegger''s Franchise

We offer qualified persons and entities the right to develop multiple Bakeries within a specified geographic area (the "Development Area") under our standard form of Development Agreement. We are not currently offering single-unit franchises without a development obligation, except that we may grant single-unit franchises to add new Bakeries in markets where we already have other Bakeries operating. Our current form of Development Agreement appears in Exhibit A to this disclosure document. Under the Development Agreement, you will have the right and the obligation to develop a specified number of Bakeries by certain deadlines. You will negotiate both the number of Bakeries and the deadlines with us. You must develop a minimum of three Bakeries. The first Bakery that you develop must have the capacity to bake bagels on the premises.

You must enter into our standard form of Franchise Agreement for each Bakery that you develop. Our current form of Franchise Agreement appears in Exhibit B to this disclosure document.

The Bakeries specialize in the retail sale of bagels, baked goods, sandwiches, soups, salads, coffees, beverages, and other menu items and merchandise related to the Bruegger''s concept, as we may authorize from time to time. The Bakeries serve breakfast, lunch, and in some locations dinner, with a preponderance of sales in the breakfast and lunch segments. The Franchise Agreement does not authorize you to sell products at wholesale or through catering initiatives to institutional guests; however, we currently have a policy that permits wholesaling under certain rules, including the requirement that you be in full compliance with your agreements and our design and operating standards. We have the right to change or revoke this policy at any time upon reasonable notice.

The Bakeries operate according to a distinctive format, appearance, and set of specifications and operating procedures (collectively, the "System-). We have described our mandatory and recommended standards and procedures in a set of confidential Operations and Training Manuals (the "Manuals"). We will loan you one copy of the Manuals for the term of your franchise. We have the right to change the Manuals and the elements of the System.

The bagels and baked goods that you will serve in the Bakeries are made from dough produced according to the proprietary recipe and manufacturing process owned by BEI. The dough products are central to the Bruegger''s concept. In order to protect the distinctive and proprietary nature of these items, you must purchase the dough from the closest dough production facility or commissary or approved supplier. If your Bakery is not within a 4-hour drive of a dough production facility or commissary, and no approved supplier is otherwise available, we will notify you before signing a Development Agreement whether we will require you to construct a dough production facility at or near the site of your first Bakery. At the same time, we will notify you either that (i) BEI will rent the space from you and equip and operate the dough production facility, or (ii) BEI will lease you the equipment necessary for you to operate the dough production facility or commissary. (See Items 7, 8 and 11 for additional information.)

A typical Bakery-Cafe is a 1,200 to 2,500 square foot facility with on-site baking capability. It is typically located in a strip shopping center with seating for about 20-50 patrons. A Kiosk is less than 1,200 square feet, does not have the capacity for on-site baking, typically does not have on-site seating, and may offer a limited menu. If the location is non-bake, you must purchase baked goods from another Bakery approved by us.

Industry-Specific Laws

We are not aware of any laws applicable to a Bruegger''s Bakery that would not apply to restaurant businesses generally. In constructing and operating Bakeries, you must comply with all applicable local, state, and federal laws, including health, sanitation, no smoking, discrimination, employment, and sexual harassment laws. The Americans with Disabilities Act ("ADA") requires that public accommodations, including restaurants, be readily accessible to disabled persons. Therefore, the ADA may affect your building construction, site elements, entrance ramps, doors, seating, bathrooms, drinking facilities, and the like. You must also obtain real estate permits and licenses and operational licenses. You should consult with your attorney concerning these and other laws and ordinances that may affect your Bakery operations.

Market and Competition

The market for the retail sale of food and beverage items like those offered in the Bakeries is highly competitive. You will compete with other shops featuring bagels and breads and with other bakery-cafe concepts, coffee bars, fast food restaurants, and grocery stores, including both local businesses and units of regional and national chains.

Although we carefully evaluate persons who wish to become our franchisees, no screening process that we implement can conclusively determine whether you will succeed as a Bruegger''s operator. Similarly, completion of our training program does not provide assurance of success. You must rely on your own assessment of your suitability (in terms of energy, business skill, desire, temperament, people skills, and financial capability, among other things) and your own advisors in deciding whether to become a Bruegger''s franchisee.