Are the Big Apple Bagels financial statements consolidated?
Big_Apple_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
See accompanying notes
Note 1 - Nature of Operations
BAB Systems, Inc. (the "Company") franchises and licenses Big Apple Bagels® ("BAB"), My Favorite Muffin® ("MFM") and SweetDuet Frozen Yogurt & Gourmet Muffins® ("SD") concepts located in the United States. The franchised units operating as "Big Apple Bagels®," featuring daily baked bagels, flavored cream cheeses, premium coffees, gourmet bagel sandwiches and other related products. The BAB units are primarily concentrated in the Midwest and Western United States. The MFM brand consists of units operating as "My Favorite Muffin Gourmet Muffin Bakery™" ("MFM Bakery"), featuring a large variety of freshly baked muffins and coffees and units operating as "My Favorite Muffin Your All-Day Bakery Café®" ("MFM Cafe") featuring these products as well as a variety of specialty bagel sandwiches and related products. Although the Company doesn't actively market Brewster's stand-alone franchises, Brewster's coffee products are sold in most franchised units.
The Company, an Illinois Corporation, incorporated on December 2, 1992, was capitalized with a cash contribution by BAB, Inc. ("Inc"), a publicly traded Company, and was originally established to franchise "Big Apple Bagels®" stores.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 86)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, the financial statements for Big Apple Bagels are not explicitly stated to be consolidated. However, Note 1 in Item 23 discusses the nature of operations for BAB Systems, Inc. and its franchising and licensing of Big Apple Bagels, My Favorite Muffin, and SweetDuet concepts. It also mentions that BAB Systems, Inc. was capitalized with a cash contribution by BAB, Inc., a publicly traded company.
Given this information, it's possible that the financial statements provided in the FDD are for BAB Systems, Inc. only, and not a consolidated statement that includes BAB, Inc. or its other brands. The note describes the different brands franchised and licensed by BAB Systems, Inc., suggesting that each brand operates somewhat independently, even though they fall under the same franchisor.
A prospective Big Apple Bagels franchisee should verify with the franchisor whether the financial statements provided are consolidated or stand-alone statements for BAB Systems, Inc. It would also be prudent to request additional financial information about BAB, Inc., the parent company, to gain a more comprehensive understanding of the overall financial health of the organization. Understanding the financial relationship between BAB Systems, Inc. and its parent company, BAB, Inc., is crucial for assessing the stability and resources available to support the Big Apple Bagels franchise system.