Against what is the deposit applied if a Big Apple Bagels franchise is granted?
Big_Apple_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
l consider, subject to the terms and conditions hereof, granting a BAGELS Franchise to PROSPECTIVE FRANCHISEE.
- F. Under a separate offering and disclosure document, Franchisor, BAB Systems, Inc., operates a franchise distribution system to own and operate stores ("My Favorite Muffin Stores") for retail
Source: Item 23 — RECEIPTS (FDD pages 87–319)
What This Means (2025 FDD)
According to Big Apple Bagels' 2025 Franchise Disclosure Document, a $10,000 deposit is collected from prospective franchisees. If a Big Apple Bagels franchise is subsequently granted, this deposit is applied towards the initial franchise fee. This deposit is made contemporaneously with the execution of a preliminary agreement.
However, the FDD also outlines conditions under which the deposit may not be fully refunded. If the prospective franchisee withdraws their application before Big Apple Bagels approves a site, they are entitled to a refund of the deposit, but Big Apple Bagels will deduct $3,000 to cover expenses related to processing the application, such as research, demographic data, preliminary layouts, site inspections, travel, employee compensation, and legal fees. The refund is also conditional on the prospective franchisee returning any written criteria for site selection provided by Big Apple Bagels.
Furthermore, if the prospective franchisee fails to execute the Franchise Agreement within 14 days of site approval by Big Apple Bagels, Big Apple Bagels has the option to terminate the Preliminary Agreement, and the prospective franchisee will not be entitled to any refund of the deposit. This highlights the importance of understanding the terms of the Preliminary Agreement and the conditions under which the deposit is refundable or non-refundable.