If I sign a Preliminary Agreement with Big Apple Bagels, what is the required deposit amount?
Big_Apple_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
hise Fee. The initial franchise fee is $25,000. If you enter into a Preliminary Agreement, you must pay BAB a deposit in the amount of $10,000. If you ultimately sign a Franchise Agreement, you must pay BAB the balance of the applicable initial franchise fee at the time you sign the Franchise Agreement. You must sign the Franchise Agreement within 14 days after we approve your site, or we may terminate the Preliminary Agreement. See Item 5 concerning the refund of your deposit. The $25,000 is for your first Franchise Agreement; if you sign more than 1 Franchise Agreement, the franchise fee is $20,000 for your 2nd and subsequent BAGELS Production Stores.
If you are a Developer, for each subsequent store developed under an Area Development Agreement, the franchise fee is $15,000 for your 2nd and subsequent BAGELS Production Stores.
(3) Store Opening Marketing Fee
You must pay the Marketing Fund a $7,500 Store Opening Marketing Fee when you sign your Franchise Agreement. The Store Opening Marketing Fee will be used in connection with your grand opening as well as for local advertising for your Store during the initial few months of operation.
(4) Professional Fees
You will need to employ a local architect, and may employ an attorney, accountant or other consultants.
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 26–34)
What This Means (2025 FDD)
According to Big Apple Bagels' 2025 Franchise Disclosure Document, if you enter into a Preliminary Agreement, you must pay Big Apple Bagels a deposit of $10,000. This deposit is part of the initial franchise fee of $25,000 for a BAGELS Production Store. If you ultimately sign a Franchise Agreement, the $10,000 deposit will be applied toward the initial franchise fee, and you will need to pay the remaining balance at the time of signing the Franchise Agreement.
However, the $10,000 deposit is subject to certain refund conditions. If you submit at least one site to Big Apple Bagels within 60 days, but the site is not approved, Big Apple Bagels will refund all but $3,000 of the deposit. If you fail to submit even one site within 60 days, you will not be entitled to any refund. Additionally, if you locate a site that Big Apple Bagels approves within 60 days, but you fail to sign a Franchise Agreement within 14 days of the approval, Big Apple Bagels may terminate the Preliminary Agreement, and you will not be entitled to any refund of the $10,000 deposit.
It is important to note that the refundability of the deposit is contingent upon meeting specific deadlines and conditions related to site selection and signing the Franchise Agreement. Prospective franchisees should carefully review these conditions and ensure they can meet the required timelines to avoid losing the deposit. This deposit structure is fairly common in franchising, as it incentivizes franchisees to actively pursue site selection while providing the franchisor with some compensation for their initial efforts in evaluating the franchisee and potential location.