From whom must a Big Apple Bagels franchisee purchase their coffee?
Big_Apple_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
You must purchase all your coffee, which is branded in your store as Brewster's, from our designated supplier. The term "supplier" in this disclosure document, when used in connection with our right to designate or approve suppliers from whom Franchisee must purchase products or services, includes not only the manufacturer, but also the distributor of those products or services. BAB, Inc. will derive revenue in the form of a license fee on your purchases of coffee from the designated source under a trademark licensing agreement between BAB, Inc., an affiliate of BAB, and the designated source. The license fee is a certain amount for each pound of coffee purchased by you from the designated source.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 35–38)
What This Means (2025 FDD)
According to Big Apple Bagels's 2025 Franchise Disclosure Document, franchisees must purchase all coffee, which is branded as Brewster's in the store, from the franchisor's designated supplier. This requirement is part of Big Apple Bagels's broader strategy to control product quality and maintain brand consistency across all franchise locations. The term 'supplier' includes both the manufacturer and the distributor.
BAB, Inc., the parent company, benefits financially from this arrangement. They receive a license fee for every pound of coffee franchisees purchase from the designated supplier. This fee is collected under a trademark licensing agreement between BAB, Inc., an affiliate of BAB, and the designated source. This revenue stream is a key component of Big Apple Bagels's business model.
This requirement ensures uniformity in the coffee served at all Big Apple Bagels locations, but it also means franchisees cannot shop around for potentially lower prices or alternative coffee brands. While franchisees are restricted to a single supplier, they benefit from the established brand recognition and marketing efforts associated with Brewster's coffee. Prospective franchisees should consider the implications of this purchasing restriction on their potential profit margins and operational flexibility.