How are disputes resolved under the Big Apple Bagels Preliminary Agreement?
Big_Apple_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Provision in Franchise Agreement (unless otherwise specified) | Summary |
|---|---|---|
| a. Length of the | Paragraph 3 | 60 days |
| Preliminary Agreement | ||
| term | ||
| b .Renewal or extension of | Paragraph 3.c.. | If you timely submit at least 1 site to us, which we do not approve, we |
| the term | may grant an extension of the term | |
| c. Requirements for Franchisee to renew or extend | Paragraph 3.c. | If you timely submit at least 1 site to us, which we do not approve, we may grant an extension of the term |
| d. Termination by Franchisee | Paragraphs 3.a, 5,a | You may withdraw your application for a franchise during term of agreement You may terminate the agreement under any grounds permitted by law. |
| e. Termination by | Not Applicable | BAB cannot terminate your Franchise Agreement without cause |
| Franchisor without cause | ||
| f. Termination by Franchisor with cause | Paragraph 5, Signature page | If you fail to sign a Franchise Agreement within 14 days of BAB's approval of your site, BAB may terminate the agreement; if you fail to sign the Preliminary Agreement and pay the deposit within 14 days of the date BAB furnishes you the Preliminary Agreement, BAB’s offer to enter into that Agreement is null and void |
| g. "Cause" defined – | Paragraph 5 | Failure to sign a Franchise Agreement within 14 days of BAB's |
| curable faults | approval of your site | |
| h. "Cause" defined – non- | Paragraph 5 | Failure to sign a Franchise Agreement within 14 days of BAB's |
| curable defaults | approval of your site | |
| i. Franchisee’s obligations | Not applicable | |
| on termination/ nonrenewal | ||
| j. Assignment of contract | Not applicable | |
| by Franchisor | ||
| k. "Transfer" by Franchisee | Paragraph 6 | You may not assign the Preliminary Agreement |
| Provision | Provision in Franchise Agreement (unless otherwise specified) | Summary |
| – definition | ||
| l. Franchisor's approval of | Not applicable | |
| transfer by Franchisee | ||
| m. Conditions for | Not applicable | |
| Franchisor's approval of | ||
| transfer | ||
| n. Franchisor's right of first | Not applicable | |
| refusal to acquire | ||
| Franchisee’s business | ||
| o. Franchisor's option to | Not applicable | |
| purchase Franchisee’s | ||
| business | ||
| p. Death or disability or | Not applicable | |
| Franchisee | ||
| q. Non-competition | Not applicable | |
| covenants during the term | ||
| of the franchise | ||
| r. Non-competition | Not applicable | |
| covenants after the | ||
| franchise is terminated or | ||
| expires | ||
| s. Modification of the | Not applicable | |
| agreement | ||
| t. Integration/merger clause | Not applicable | |
| u. Dispute resolution by arbitration or mediation | Paragraph 9 | In accordance with the American Arbitration Association in the major city nearest where our principal office address is then located (currently it would be Chicago, Illinois). Subject to applicable state law |
| v. Choice of forum | Paragraph 9 | Arbitration (subject to applicable state law) |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 69–75)
What This Means (2025 FDD)
According to the 2025 Big Apple Bagels Franchise Disclosure Document, dispute resolution under the Preliminary Agreement involves arbitration in accordance with the American Arbitration Association (AAA). The arbitration will occur in the major city nearest to Big Apple Bagels' principal office, which is currently Chicago, Illinois. This process is subject to applicable state law.
This means that if a dispute arises between a prospective franchisee and Big Apple Bagels during the term of the Preliminary Agreement, the parties are required to resolve it through arbitration rather than through the court system. Arbitration typically involves presenting evidence and arguments to a neutral arbitrator who makes a binding decision. Using the AAA rules ensures a structured and recognized process for resolving the dispute.
For a prospective Big Apple Bagels franchisee, understanding this arbitration clause is crucial. It dictates the method and location for resolving any potential disputes during the preliminary phase. While arbitration can sometimes be quicker and less expensive than litigation, it also limits the franchisee's ability to pursue claims in court. Franchisees should consider the implications of arbitrating in Chicago, Illinois, as it may involve travel and associated costs.