Can the Big Apple Bagels franchisor assign the Area Development Agreement?
Big_Apple_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Provision in Area Development Agreement | Summary |
|---|---|---|
| j. Assignment of contract | Paragraph 12.A. | No restriction on BAB's right to assign |
| by Franchisor |
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, Big Apple Bagels has the right to assign the Area Development Agreement. The FDD states that there is "no restriction on BAB's right to assign". This means that Big Apple Bagels, as the franchisor, can transfer its rights and obligations under the Area Development Agreement to another party without needing the franchisee's approval.
For a prospective franchisee, this clause signifies that the relationship they initially establish with Big Apple Bagels could change if the Area Development Agreement is assigned to a new entity. The new entity would then assume the franchisor's responsibilities and rights. While the terms of the Area Development Agreement itself should remain the same, the franchisee would be dealing with a different management structure and potentially a different business philosophy.
It is common in franchising for franchisors to retain the right to assign agreements, as it provides them with flexibility in managing their business and planning for succession or other business changes. However, franchisees should carefully consider the implications of this clause and ensure they are comfortable with the possibility of working with a different franchisor during the term of their Area Development Agreement. Franchisees should seek legal counsel to fully understand their rights and obligations in such a scenario.