Where in the Big Apple Bagels FDD is the 'Premises' defined?

According to Big Apple Bagels' 2025 Franchise Disclosure Document, the term "Premises" is defined within the Collateral Assignment of Lease agreement. Specifically, it refers to the location commonly known as the site where the Big Apple Bagels store will operate, as detailed in the lease agreement. This definition is important because the franchisee is assigning their rights, title, and interest in that lease to BAB Systems, Inc. as collateral.

This assignment serves as a security measure for Big Apple Bagels. If the franchisee defaults on the lease or the Franchise Agreement, Big Apple Bagels has the right to take possession of the premises. The franchisee warrants that they have the authority to assign the lease and have not previously done so to another party. They also agree not to alter or terminate the lease without Big Apple Bagels' written consent.

Furthermore, if the franchisee owns the land and/or building where the Big Apple Bagels store is located, they grant Big Apple Bagels an option to lease the premises on a triple-net basis for the remaining term of the Franchise Agreement. The rental rate will be determined as a reasonable commercial rate by a licensed real estate broker selected by Big Apple Bagels. This ensures that Big Apple Bagels can continue operating the store even if the franchisee defaults or leaves the business.

This collateral assignment of lease is a common practice in franchising to protect the franchisor's investment and brand integrity by ensuring continued operation at an approved location. Prospective franchisees should carefully review the terms of the lease and the Collateral Assignment of Lease to understand their obligations and the potential consequences of default.