From whom must a Big Apple Bagels franchisee purchase their cream cheese?
Big_Apple_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
f coffee purchased by you from the designated source.
You must purchase your cream cheese, either in block form or prepackaged spreads, from our designated supplier. BAB, Inc. will derive revenue in the form of a license fee on your purchases of cream cheese from the designated source under a licensing agreement between BAB, Inc., an affiliate of BAB, and the designated source. The license fee is a certain amount for each pound of cream cheese purchased by you from the designated source.
If you are a BAGELS Satellite Store franchisee, the bagels sold in your Store must be supplied by your own BAGELS Production Store.
You must purchase BAB's proprietary muffin mix for My Favorite Muffin branded muffins. You must purchase this proprietary muffin mix and other bakery products from suppliers designated by BAB.
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 their cream cheese, either in block form or prepackaged spreads, from Big Apple Bagels's designated supplier. BAB, Inc., an affiliate of Big Apple Bagels, will receive revenue in the form of a license fee based on the amount of cream cheese purchased by the franchisee from the designated source.
This requirement ensures consistency in product quality and taste across all Big Apple Bagels locations. However, it also means franchisees cannot shop around for the best prices on cream cheese and are dependent on the designated supplier's pricing and supply chain. The license fee paid to BAB, Inc. adds an additional cost to the franchisee's expenses.
In the fiscal year ended November 30, 2024, BAB, Inc. derived $2,849 in license fee revenue from cream cheese purchases made by franchisees. This figure gives a sense of the scale of cream cheese sales across the franchise system and the revenue generated for the franchisor from this particular product. Prospective franchisees should consider this mandatory purchasing arrangement and associated fees when evaluating the potential profitability of a Big Apple Bagels franchise.
It is typical in franchising to require franchisees to purchase certain products from approved suppliers to maintain quality control and brand consistency. However, franchisees should carefully evaluate the costs and benefits of these arrangements and understand how they impact their bottom line.