What is the meaning of 'Area' in the context of the Preliminary Agreement with Big Apple Bagels?
Big_Apple_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
or "My Favorite Muffin Your All Day Bakery Cafe," one of which is their primary identifying brand.
THEREFORE, the parties agree as follows:
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- PROSPECTIVE FRANCHISEE has, contemporaneously with the execution of this Preliminary Agreement, deposited with BAB the sum of Ten Thousand ($10,000.00) Dollars ("Deposit") to be applied against the initial franchise fee payable by PROSPECTIVE FRANCHISEE if a BAGELS Franchise shall subsequently be granted.
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- Upon execution of this Agreement, BAB will furnish PROSPECTIVE FRANCHISEE its written criteria for site selection, which must be returned to BAB upon termination of this Agreement.
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- It shall be the obligation of PROSPECTIVE FRANCHISEE to search for, locate, and submit in writing to BAB for approval, within sixty (60) days after execution of this Preliminary Agreement, a site suitable for the operation of a BAGELS Store acceptable to BAB within the following area: _______________________________ (the "Area").
- 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.
- b.
Source: Item 23 — RECEIPTS (FDD pages 87–319)
What This Means (2025 FDD)
According to Big Apple Bagels' 2025 Franchise Disclosure Document, the 'Area' in the context of the Preliminary Agreement refers to a specific geographic location where the prospective franchisee will search for a suitable site to operate a Big Apple Bagels store. Within 60 days of signing the Preliminary Agreement, the prospective franchisee must identify and submit a potential site within this designated 'Area' to Big Apple Bagels for approval.
However, this 'Area' is explicitly defined as non-exclusive and unprotected. This means that even during the term of the Preliminary Agreement, Big Apple Bagels retains the right to offer and grant franchises to other parties, including competitors like 'My Favorite Muffin Stores,' within the same 'Area'. If Big Apple Bagels does grant a franchise to another party in the 'Area', the prospective franchisee has the right to terminate the Preliminary Agreement and receive a full refund of their deposit.
It's important to note that if the prospective franchisee later enters into an Area Development Agreement with Big Apple Bagels, they may then receive a protected territory as defined in that separate agreement. The franchisor also retains the right to withhold approval of submitted sites based on various criteria, including location, demographics, traffic patterns, competition, and lease terms. If a site is not approved within the initial 60-day period, Big Apple Bagels may either extend the period or terminate the agreement, refunding the deposit less $3,000.