Is the initial franchise fee for a Big Apple Bagels franchise refundable?
Big_Apple_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Expenditure | Estimated Amount or Estimated High-Low Range | Method of Payment | When Due | To Whom Paid | |
|---|---|---|---|---|---|
| Initial Franchise Fee (1,2) | $25,000 | Lump Sum less Franchise Fee Deposit paid | When you sign the Franchise Agreement | BAB | |
| Store Opening Marketing Fee(3) | $7,500 | Lump Sum | Upon signing Franchise Agreement | BAB (BAGELS Marketing Fund) | |
| Professional Fees(4) | $5,000 - $10,000 | As Agreed | As incurred | Professionals | |
| First Month's Rent and Security | $4,000 - $9,000 | As agreed in | As agreed in lease | Lessor | |
| Deposit(5) | lease | ||||
| Insurance(6) | $5,000-$9,000 | Lump Sum | As incurred | Insurance Company | |
| Leasehold Improvements(7) | $170,000 - $292,000 | As agreed | As incurred | Suppliers | |
| Exterior and Interior Signage | $6,000 - $12,000 | As agreed | As incurred | Designated | |
| and Display (8) | Supplier | ||||
| Furniture, Fixtures, Equipment | $226,000 - $270,000 | As agreed | As incurred | Approved | |
| (9) | Suppliers | ||||
| Training(10) | $2,000 - $5,000 | As incurred | Before Opening | Hotels; Transportation Lines; Car; Restaurants | |
| Prepaid Expenses, Deposits(11) | $500 - $1,500 | Lump Sum | As incurred | Third Parties | |
| Opening Inventory, Supplies(12) | $15,000-$23,000 | As agreed | As incurred | Approved Suppliers | |
| Additional Funds - 3 months(13) | $12,000 - $18,000 | Varies | As incurred | Third Parties | |
| TOTALS | $478,000-$685,000 | Except for the Franchise Fee Deposit, the payments in the table above are non-refundable. The refundability of the Franchise Fee Deposit under the Preliminary Agreement is as follows: If you submit at least 1 site to BAB within the 60 days, but the site is not approved, BAB will refund all but $3,000 of the deposit. If you fail to submit even 1 site to BAB within the 60 days, you will not be entitled to a refund of any of the deposit. If you locate a site and sign a Franchise Agreement, the $10,000 deposit will be applied toward the initial franchise fee. If you locate a site and it is approved by BAB within the 60 days but you fail to sign a Franchise Agreement within 14 days of the approval, BAB may terminate the Preliminary Agreement and you will not b |
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 26–34)
What This Means (2025 FDD)
According to Big Apple Bagels' 2025 Franchise Disclosure Document, a portion of the initial franchise fee may be refundable under specific conditions related to a Preliminary Agreement. The initial franchise fee is $25,000. If a prospective franchisee signs a Preliminary Agreement, they must pay a $10,000 deposit. This deposit's refundability depends on whether the franchisee submits a site to Big Apple Bagels (BAB) for approval within 60 days.
If at least one site is submitted within 60 days but is not approved by Big Apple Bagels, the franchisee is entitled to a refund of the deposit, less $3,000. Therefore, in this scenario, $7,000 would be refunded. However, if the franchisee fails to submit any site within the 60-day period, they will not receive any refund of the $10,000 deposit. If a site is approved within the 60-day window and the franchisee signs a Franchise Agreement, the $10,000 deposit is then applied towards the total initial franchise fee.
It's important to note that if a site is approved by Big Apple Bagels within the 60 days, but the franchisee does not sign the Franchise Agreement within 14 days of the approval, Big Apple Bagels may terminate the Preliminary Agreement. In this case, the franchisee will not be entitled to any refund of the $10,000 deposit. Except for the potential refund of the Franchise Fee Deposit under the Preliminary Agreement, the FDD states that all other payments listed in the initial investment table are non-refundable. This condition regarding the deposit refund is a crucial factor for potential franchisees to consider, as it ties the refund to active and timely site selection efforts.