What happens if the franchisee has not furnished Big Apple Bagels with a balance sheet?
Big_Apple_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
ighth (8th) day from the date performance is due, up through and including the day the default is cured, if he fails to report the Gross Revenues of the BAGELS Store as set forth in Subparagraph 11.b.i. by the stated deadline.
- c. Failure to Furnish Register Tapes or Reports, Financial Statements and Tax Returns. Franchisee shall pay Franchisor a fee of One Hundred Dollars ($100) per day, beginning on the fifteenth (15th) day from the date performance is due, up through and including the day the default is cured, if he fails to furnish the register tapes or reports, financial statements, and/or tax returns as set forth in Subparagraphs 11.b.ii – v by the stated deadlines.
- d. Failure to Pay Royalty Fees or Marketing Fund contributions. Franchisee shall pay Franchisor a fee of One Hundred Dollars ($100) per day, beginning on the fifteenth (15th) day from the date performance is due, up through and including the day the default is cured, if Franchisee is in default in the payment of the royalty fee required under Subparagraph 8.b. or Marketing Fund contribution under Subparagraph 10.a.i.
- e. Failure to Properly Use Proprietary Products.
Source: Item 22 — CONTRACTS (FDD pages 86–87)
What This Means (2025 FDD)
According to Big Apple Bagels' 2025 Franchise Disclosure Document, failure to furnish financial statements, including a balance sheet, by the stated deadlines results in monetary fees. Big Apple Bagels may impose a fee of $100 per day, beginning on the 15th day from the date performance is due, up to and including the day the default is corrected.
In addition to monetary fees, if an audit is required because the franchisee failed to furnish the required reports, financial statements, or other documents on time, the franchisee will be responsible for reimbursing Big Apple Bagels for the cost of the audit. This reimbursement covers charges from independent accountants, travel expenses, room and board, and compensation for Big Apple Bagels' employees involved in the audit.
These financial reporting requirements are typical in franchising, allowing Big Apple Bagels to monitor the financial health of its franchisees and ensure compliance with the franchise agreement. Franchisees should maintain meticulous records and adhere to the deadlines to avoid these penalties and potential audit costs. The penalties for non-compliance are in addition to any other remedies Big Apple Bagels may pursue under the agreement or applicable law.