For a Big Apple Bagels franchise in Virginia, what is the condition for the franchisor to cancel the agreement?
Big_Apple_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
her accrued liabilities | 6 1,950 | 55,702 | | Total Deferred Income Tax Assets | 1 63,767 | 167,917 | | Depreciation and amortization | ( 354,217) | (354,217) | | Total Deferred Income Tax Liabilities | ( 354,217) | (354,217) | | Total Net Deferred Tax Liabilities | $ (190,450) | $ (186,300) | R:\59000s\59000 - 59099\59039 BAB Bagels\2025 Franchise Filings General\BAB FDD2025.001 multistate marked up by CKT 02 04 2025.docx
Big Apple Bagels
| 2. | Item | 17, | i. of the Franchise | Disclosure Document | on "Franchisee’s obligations | on |
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EXHIBIT R BAB SYSTEMS, INC. ADDENDUM TO THE BAGELS FRANCHISE AGREEMENT FOR THE COMMONWEALTH OF VIRGINIA
This Addendum is to a BAGELS Franchise Agreement dated , 20 between BAB Systems, Inc. and (Franchisee) to amend said Agreement as follows: 1. Paragraph 16.a.x. of the BAGELS Franchise Agreement on Termination for Failure to Complete Training is amended to read in its entirety as follows: Successful Completion of Training. The grant of the franchise herein is conditioned upon successful completion of the sales/operations seminar and technical training seminar by Franchisee (or Franchisee's individual owner if Franchisee is a corporation, partnership, or other entity.) If during the course of the training programs or within fifteen (15) days thereafter Franchisor concludes that Franchisee has not successfully completed the sales/operations seminar and technical training seminar, may, in its sole discretion and judgment, cancel this Agreement and all rights hereunder, where permitted by applicable law, by giving notice to Franchisee and tendering to Franchisee a refund of its initial franchise fee less an amount to cover the reasonable expenses incurred by Franchisor in connection with training Franchisee. Franchisee agrees that such refund shall be the full extent of Franchisor's liability and responsibility in the event of such cancellation, and Franchisee and its owners shall execute a general release, in a form satisfactory to Franchisor, of any and all claims against Franchisor and its affiliates, officers, directors, employees and agents. Upon cancellation of this Agreement, Franchisee shall return to Franchisor all materials, manuals, information and all other items that Franchisee received from Franchisor, including all copies thereof and notes thereon which Franchisee may have or control.
Source: Item 23 — RECEIPTS (FDD pages 87–319)
What This Means (2025 FDD)
According to Big Apple Bagels' 2025 Franchise Disclosure Document, an addendum specific to Virginia modifies the standard franchise agreement regarding termination. Specifically, Big Apple Bagels can cancel the franchise agreement if the franchisee fails to successfully complete the sales/operations seminar and technical training seminar. This determination is made at Big Apple Bagels' sole discretion during the training or within 15 days after.
Should Big Apple Bagels determine that the franchisee has not successfully completed the training, they will provide notice of cancellation and refund the initial franchise fee, less an amount covering reasonable expenses incurred for the training. The franchisee must then sign a general release, absolving Big Apple Bagels from further liability.
Upon cancellation, the franchisee is obligated to return all materials, manuals, and information received from Big Apple Bagels, including copies and notes, and must maintain the confidentiality of the BAB System information. Furthermore, the franchisee is prohibited from using any trade secrets or confidential information obtained during training in any similar food service business. However, the addendum also states that it is unlawful for a franchisor to cancel a franchise without reasonable cause, and if any grounds for default or termination stated in the BAGELS Franchise Agreement or the BAGELS Area Development Agreement do not constitute "reasonable cause," as that term may be defined in the Virginia Retail Franchising Act or the laws of Virginia, that provision may not be enforceable.