What is the Big Apple Bagels franchisee's obligation if they do not intend to renew the franchise?
Big_Apple_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
In the event Franchisee does not intend to renew, Franchisee has a mandatory obligation to give Franchisor written notice of Franchisee's intent not to renew the franchise at least six (6) months prior to the expiration date of this Agreement.
If Franchisee fails to give Franchisor at least six (6) months' notice of its intent not to renew, notwithstanding anything to the contrary contained in this Agreement, Franchisor has the right to impose an automatic renewal of this Agreement, effective on this Agreement's scheduled expiration date ("Renewal Date"), for a renewal term of ten (10) years.
In all events, upon renewal, Franchisee shall be obligated to pay Franchisor, as of the Renewal Date, the Renewal Fee set forth in Paragraph 2.b.i.(g).
Source: Item 22 — CONTRACTS (FDD pages 86–87)
What This Means (2025 FDD)
According to the 2025 Big Apple Bagels Franchise Disclosure Document, a franchisee must provide written notice to Big Apple Bagels if they do not intend to renew their franchise agreement. This notification must be given at least six months before the franchise agreement's expiration date. Failing to provide this notice within the specified timeframe can lead to an automatic renewal of the agreement for an additional ten-year term.
This requirement ensures that Big Apple Bagels has adequate time to find a new franchisee for the location. It allows the company to begin the process of advertising the franchise opportunity or contracting with a business broker to find a suitable replacement. This protects Big Apple Bagels's interests by preventing a lapse in operations at the location and maintaining the brand's presence in the market.
If a franchisee fails to provide the required six-month notice, Big Apple Bagels has the right to impose an automatic ten-year renewal of the franchise agreement. This clause is designed to prevent franchisees from simply walking away from their obligations without giving Big Apple Bagels sufficient time to prepare. However, the franchisee will be obligated to pay Big Apple Bagels the renewal fee as of the Renewal Date.
This policy has significant implications for franchisees. It underscores the importance of carefully considering their long-term plans and communicating those plans to Big Apple Bagels in a timely manner. Franchisees should mark the notification deadline on their calendars and ensure that they send written notice of their intent not to renew well in advance to avoid the possibility of an unwanted automatic renewal.