What is the condition for any refund of deposit to a prospective Big Apple Bagels franchisee?
Big_Apple_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
- b. Any refund of deposit is conditioned on PROSPECTIVE FRANCHISEE returning to BAB any written criteria for site selection referred to in Paragraph 3 above. The amount withheld by BAB is to compensate the expenses incurred by BAB in connection with PROSPECTIVE FRANCHISEE's proposed purchase of a BAGELS Franchise, including, without limitation, those expenses related to research, demographics data, preliminary layouts, inspection of a site for PROSPECTIVE FRANCHISEE's BAGELS Store, travel and living expenses, compensation of employees of BAB and legal fees and expenses.
Source: Item 23 — RECEIPTS (FDD pages 87–319)
What This Means (2025 FDD)
According to Big Apple Bagels' 2025 Franchise Disclosure Document, a prospective franchisee can get a refund of their deposit if they return the written criteria for site selection that Big Apple Bagels provides. If the prospective franchisee withdraws their application before Big Apple Bagels approves a site, they can terminate the agreement and receive a refund of their deposit, minus $3,000. This $3,000 is withheld to cover expenses Big Apple Bagels incurs while considering the franchise, such as research, demographic data, preliminary layouts, site inspections, travel, employee compensation, and legal fees.
However, the FDD also states that if the prospective franchisee fails to submit any sites to Big Apple Bagels within 60 days, Big Apple Bagels can terminate the agreement, and the prospective franchisee will not be entitled to any refund of the deposit. Similarly, if the prospective franchisee fails to execute the Franchise Agreement within fourteen days of site approval by Big Apple Bagels, they will not be entitled to a refund.
These conditions are fairly typical in franchising, as franchisors often incur significant costs in evaluating potential franchisees and sites. The specific amounts and timeframes can vary, so it is important for a prospective Big Apple Bagels franchisee to carefully review the Preliminary Agreement and understand the conditions under which a deposit refund is possible.