What is the dependency for a Big Apple Bagels franchisee to participate in the Wholesale Program?
Big_Apple_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
| This is an Addendum to the BAB Systems, Inc. Franchise Agreement granted to |
|---|
| dated |
| , |
| 20 (the "Franchise Agreement") and is considered to be part of that agreement. All capitalized |
| or initially capitalized terms used in this Addendum but not defined herein shall have the same |
| meaning as ascribed to them in the Franchise Agreement. The Wholesale Program contemplated by |
| this Addendum will be subject to all of the provisions contained in the Franchise Agreement, as |
| modified by this Addendum, and shall apply only to the wholesale distribution of bagels |
| and muffins |
| produced in a BAGELS Production Store |
| ("BAGELS Production Store"). A BAGELS Production |
| Store |
| is distinguished from a BAGELS Satellite Store. Collectively, BAGELS Production Stores and |
| BAGELS Satellite Stores are referred to as "BAGELS Stores." The bagels and muffins shall be |
| unbranded, unless, at Franchisee's option, Franchisee elects to brand the |
| bagels |
| "Jacobs Bros." |
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- Franchisee is granted the right to sell at wholesale unbranded bagels and muffins or "Jacobs Bros." branded bagels ("Wholesale Products") produced in the BAGELS Production Store on a nonexclusive basis outside of the BAGELS Production Store under the conditions as set forth herein. The right of Franchisee to participate in this Wholesale Program is expressly conditioned upon Franchisee being in good standing.
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- Franchisee must obtain Franchisor's prior written approval for each wholesale customer to whom Franchisee wishes to sell Wholesale Products. Franchisee must submit to Franchisor the name of each proposed wholesale customer, including the customer's address and purchase requirements. Franchisee may not sell Wholesale Products to any customer until Franchisor gives its approval in writing.
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- Franchisee explicitly acknowledges and agrees that any delivery of Wholesale Products is his sole and exclusive responsibility. Franchisee is to determine whether customers are to pick up Wholesale Products at the BAGELS Production Store or Franchisee may deliver Wholesale Products to customers.
Source: Item 22 — CONTRACTS (FDD pages 86–87)
What This Means (2025 FDD)
According to Big Apple Bagels' 2025 Franchise Disclosure Document, a franchisee's right to participate in the Wholesale Program is contingent upon several factors. Primarily, the franchisee must be in good standing with Big Apple Bagels. Additionally, the franchisee is required to obtain product liability, delivery vehicle, and umbrella insurance coverages in amounts determined by Big Apple Bagels, as specified in the Operations Manual.
Prior written approval from Big Apple Bagels is mandatory for each wholesale customer. The franchisee must submit the customer's name, address, and purchase requirements for approval before selling any Wholesale Products. Furthermore, the Wholesale Program must be operated in strict accordance with the Franchise Agreement and the Operations Manual, with all wholesale sales subject to the royalty fees outlined in the Franchise Agreement.
It's also important to note that the right to distribute Wholesale Products is not automatically assignable if the franchisee's Big Apple Bagels Production Store is sold or assigned. Big Apple Bagels retains the discretion to terminate the franchisee's participation in the Wholesale Program upon assignment. The right to distribute Wholesale Products cannot be separated from other rights in the Franchise Agreement, meaning that if the Franchise Agreement is terminated or expires, the Wholesale Program Addendum also terminates or expires. These stipulations ensure that Big Apple Bagels maintains control over the quality and distribution of its products through the Wholesale Program.