What are a Big Apple Bagels franchisee's obligations upon termination or non-renewal of the Franchise Agreement?
Big_Apple_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Provision in Franchise Agreement (unless otherwise specified) | Summary |
|---|---|---|
| a. Length of the franchise | Paragraph 2.a. | 10 years |
| term | ||
| b .Renewal or extension of | Paragraph 2.b. | If you are in good standing, you can renew on the then current terms |
| the term | ||
| c. Requirements for Franchisee to renew or extend | Paragraph 2.b. | Pay renewal fee of $2,500, maintain premises or secure substitute premises, remodel, sign new agreement and other documents and sign release, and agree to upgrade to then-current standards of decor, equipment, and product offerings. The renewal agreement may contain materially different terms and conditions than your original contract, but the royalty fee will not be greater than the royalty fee that we then impose on similarly-situated renewing franchisees |
| d. Termination by | Section 15 | Breach by BAB, you in compliance. Additionally, you may terminate |
| Franchisee | the agreement under any grounds permitted by law. | |
| e. Termination by | Not Applicable | BAB cannot terminate your Franchise Agreement without cause |
| Franchisor without cause | ||
| f. Termination by | Section 16 | BAB can terminate only if you commit any 1 of several listed |
| Franchisor with cause | violations | |
| g. "Cause" defined – curable faults | Section 16 | You have 10 days for monetary defaults and failure to maintain required insurance, and 30 days for all defaults not listed in Paragraph 16.a. |
| h. "Cause" defined – non- curable defaults | Section 16 | Failure to submit site within 90 days, failure to open Store in 4 months of possession, failure to complete initial training, abandonment, conviction of felony, unauthorized transfers, unauthorized use or disclosure of confidential information or BAGELS Operations Manual, unauthorized use of Marks, creation of a threat to public health or safety, repeated defaults (even if cured), unapproved transfer upon your death or permanent incapacity, failure to comply with covenants in Paragraph 9.f; termination of other agreement between BAB and you. |
| i. Franchisee’s obligations on termination/ nonrenewal | Section 17 t | Franchise Agreement: Pay outstanding amounts, complete de- identification, return confidential information, covenant not to compete, continuing obligations, BAB option to purchase. |
| j. Assignment of contract | Paragraph 14.a. | No restrictions on BAB's right to assign |
| by Franchisor | ||
| k. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 69–75)
What This Means (2025 FDD)
According to Big Apple Bagels' 2025 Franchise Disclosure Document, upon termination or non-renewal of the Franchise Agreement, a franchisee has several obligations. These include paying all outstanding amounts owed to Big Apple Bagels. The franchisee must also complete the de-identification process, which involves removing all Big Apple Bagels branding and signage from the premises to ensure it no longer appears to be a Big Apple Bagels location.
Additionally, the franchisee is required to return all confidential information, such as operations manuals, recipes, and other proprietary materials, to Big Apple Bagels. The franchisee must also adhere to a covenant not to compete, which restricts them from engaging in a similar business within a specified area and timeframe. Furthermore, certain obligations continue even after termination or non-renewal, and Big Apple Bagels retains the option to purchase the franchise.
Specifically, the non-compete agreement restricts involvement in a competing business anywhere during the franchise term. After termination or expiration, the franchisee cannot engage in a competing business for two years at the store location or within 10 miles of the franchisee's store, or any other Big Apple Bagels or My Favorite Muffin store. These obligations are designed to protect Big Apple Bagels' interests and brand reputation even after the franchise relationship ends.