In a Big Apple Bagels franchise assignment, what specific agreement are the promises, covenants, conditions, and agreements related to?
Big_Apple_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
- (6) the assignee, transferee or purchaser (and its owners) shall, at Franchisor's sole discretion, have executed and agreed to be bound by: (i) an assignment and assumption agreement satisfactory to the Franchisor, whereby the transferee assumes the obligations of Franchisee under this Agreement; or (ii) Franchisor's then-current form of Franchise Agreement, for a new term (not equal to the remaining term of the assignor's franchise), which may provide for a different rate for royalty fees and Marketing Fund contributions required hereunder;
Source: Item 22 — CONTRACTS (FDD pages 86–87)
What This Means (2025 FDD)
According to Big Apple Bagels' 2025 Franchise Disclosure Document, the promises, covenants, conditions, and agreements in a franchise assignment relate to the original Franchise Agreement. Specifically, if a franchisee wishes to transfer their Big Apple Bagels franchise to a new owner, the new owner (transferee) must agree to assume the obligations of the original franchisee under the existing Franchise Agreement. Alternatively, at Big Apple Bagels' discretion, the transferee may be required to execute the then-current form of the Franchise Agreement, which could include different terms such as royalty fees and marketing fund contributions.
Several conditions must be met for Big Apple Bagels to approve the transfer. The proposed transferee must be financially responsible, of good moral character, and suitable to operate a Big Apple Bagels store. The franchisee must pay a transfer fee of $5,000.00. The franchisee must also settle all outstanding debts to Big Apple Bagels and its affiliates. Both the franchisee and the transferee must release any claims against Big Apple Bagels. The lessor of the premises must consent to the assignment or sublease, if required. Big Apple Bagels must approve the material terms of the assignment.
Furthermore, the transferring franchisee may remain liable for the transferee's performance under the Franchise Agreement for the remainder of the original term, and the transferee may need to complete a training program. If the transferee had prior contact with Big Apple Bagels regarding a franchise opportunity, the franchisee must pay Big Apple Bagels a sum equal to ten percent (10%) of the gross sales price, not exceeding the current initial Franchise Fee. The transferee must also submit a Store Opening Marketing Fee of $1,000 for a "re-Grand Opening."
These conditions ensure that Big Apple Bagels maintains control over who operates its franchises and that the brand's standards are upheld even when ownership changes. Prospective franchisees should carefully consider these requirements and the associated costs when evaluating a Big Apple Bagels franchise opportunity, particularly if they anticipate needing to transfer the franchise in the future.