What is the impact of the Area not being exclusive or protected on the PROSPECTIVE FRANCHISEE's rights with Big Apple Bagels?
Big_Apple_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
- a.
The Area is not exclusive or protected either during the term of this Agreement or in the event a franchise is granted.
BAB has the right to offer and grant a franchise to any other party within the Area.
In the event BAB grants a franchise, whether a franchise for a BAGELS Franchise of a "My Favorite Muffin Store" to another party within the Area during the term of this Agreement, PROSPECTIVE FRANCHISEE may terminate this Agreement and obtain a full refund of the Deposit.
In the event PROSPECTIVE FRANCHISEE enters into an Area Development Agreement with BAB, and becomes an Area Developer, he will have a protected territory, as set forth in the Area Development Agreement.
Source: Item 23 — RECEIPTS (FDD pages 87–319)
What This Means (2025 FDD)
According to Big Apple Bagels' 2025 Franchise Disclosure Document, the Area assigned to a prospective franchisee is not exclusive or protected. This means that during the term of the Preliminary Agreement, Big Apple Bagels retains the right to offer and grant a franchise to any other party within the same Area.
This has a significant impact on the prospective franchisee because Big Apple Bagels can grant a franchise for a Big Apple Bagels store or even a "My Favorite Muffin Store" to another party within the Area. If this happens, the prospective franchisee has the right to terminate the Preliminary Agreement and receive a full refund of their deposit. However, until the prospective franchisee enters into an Area Development Agreement with Big Apple Bagels and becomes an Area Developer, they will not have a protected territory.
This lack of exclusivity introduces a level of risk for the prospective franchisee. While they have the option to terminate the agreement and receive a refund if another franchise is granted in the Area, they may have already invested time and resources into searching for a suitable site. It is important for prospective franchisees to carefully consider this non-exclusive arrangement and its potential impact on their investment and business plans. They should also inquire about Big Apple Bagels's strategy for granting franchises within specific areas to better understand the potential for competition.