What deposit is required for the Preliminary Agreement for a Big Apple Bagels franchise?
Big_Apple_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
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D. Preliminary Agreement
You may, but are not required to, sign a Preliminary Agreement (attached as Exhibit A) and pay a $10,000 deposit for a BAGELS Franchise. You would sign it if you do not have a location for a BAGELS Store and you want to locate your site prior to the execution of a Franchise Agreement. The Preliminary Agreement gives the prospective franchisee a period of 60 days in which to locate a site. If you submit at least 1 site to BAB within the 60 days, but the site is not approved, BAB may, at any time thereafter at its sole discretion, either grant an extension to the above referenced 60 day period or terminate the Preliminary Agreement. If BAB elects to terminate the Preliminary Agreement, it will refund all but $3,000 of the deposit. If you fail to submit even 1 site to BAB within the 60 days, you will not be entitled to a refund of any of the deposit. If you locate a site and sign a Franchise Agreement, the $10,000 deposit will be applied toward the initial franchise fee. If you locate a site and it is approved by BAB within the 60 days but you fail to sign a Franchise Agreement within 14 days of the approval, BAB may terminate the Preliminary Agreement and you will not be entitled t
Source: Item 5 — INITIAL FEES (FDD pages 18–20)
What This Means (2025 FDD)
According to Big Apple Bagels's 2025 Franchise Disclosure Document, a prospective franchisee may choose to sign a Preliminary Agreement and pay a $10,000 deposit. This agreement is optional and intended for those who need to secure a location before committing to a full Franchise Agreement.
The Preliminary Agreement grants the prospective franchisee a 60-day period to find a suitable site for their Big Apple Bagels store. To maintain the agreement's validity, at least one site proposal must be submitted to Big Apple Bagels within this timeframe. If a site is submitted but not approved, Big Apple Bagels has the option to extend the 60-day period or terminate the agreement.
If Big Apple Bagels terminates the Preliminary Agreement due to non-approval of a submitted site, all but $3,000 of the deposit will be refunded. However, if no site is submitted within the initial 60 days, the entire $10,000 deposit is forfeited. Similarly, if a site is approved but the franchisee fails to sign a Franchise Agreement within 14 days of approval, the deposit is non-refundable. If a franchisee locates a site and signs a Franchise Agreement, the $10,000 deposit will be applied toward the initial franchise fee.