How is the non-refundable Development Fee determined for an Area Development Agreement with Big Apple Bagels?
Big_Apple_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
C. Area Development Agreement
BAB charges a non-recurring and non-refundable Development Fee which you must pay in a lump sum when you sign the Area Development Agreement. This fee is determined by multiplying the aggregate Minimum Development Quota by $5,000 (but not counting your 1st BAGELS Production Store). The amount of the Development Fee will be inserted in Rider B to the Area Development Agreement before you sign the Area Development Agreement.
Developer is required, if he is not already a BAGELS Franchisee, to sign 1 Franchise Agreement and pay the $25,000 franchise fee, simultaneously with the execution of the Area Development Agreement.
With respect to each BAGELS Production Store or BAGELS Satellite Store Developer opens under the Area Development Agreement, he must sign BAB's then current standard Franchise Agreement and pay BAB the initial franchise fee shown above in this Item 5. The Development Fee
is not applied to the franchise fees for each unit developed. The initial franchise fees for BAGELS Production Stores opened by Developer are:
2 nd and subsequent BAGELS Production Stores $15,000
The initial franchise fee for each BAGELS Satellite Store opened by Developer is $10,000.
The initial franchise fees for BAGELS Production Stores and BAGELS Satellite Stores, up to the number of Stores required by Developer's Minimum Development Quota, are not subject to increase, even if BAB in the future increases the initial franchise fees for new franchisees. In the event Developer opens more than the number of Stores required to meet his Minimum Development Quota, either within or outside his Exclusive Development Area, the Developer will pay then-current initial franchise fee, which may be different than the $15,000 initial franchise fee noted above. The "Minimum Development Quota" is the cumulative number of signed leases Developer must have within the Exclusive Development Area for BAGELS Productio
Source: Item 5 — INITIAL FEES (FDD pages 18–20)
What This Means (2025 FDD)
According to Big Apple Bagels's 2025 Franchise Disclosure Document, the Development Fee for an Area Development Agreement is calculated by multiplying the aggregate Minimum Development Quota by $5,000. However, the first Big Apple Bagels Production Store is not counted in this calculation. This fee is non-recurring and non-refundable, and it must be paid in a lump sum when the Area Development Agreement is signed. The specific amount of the Development Fee will be detailed in Rider B of the Area Development Agreement before signing.
In addition to the Development Fee, if the developer is not already a Big Apple Bagels franchisee, they must sign a Franchise Agreement and pay a $25,000 franchise fee simultaneously with the execution of the Area Development Agreement. For each subsequent Big Apple Bagels Production Store or Big Apple Bagels Satellite Store opened under the Area Development Agreement, the developer must sign the current standard Franchise Agreement and pay the initial franchise fee, as outlined in Item 5 of the FDD. It is important to note that the Development Fee is separate and cannot be applied towards these individual franchise fees.
The initial franchise fees for Big Apple Bagels Production Stores opened by the developer after the first store are $15,000, while the initial franchise fee for each Big Apple Bagels Satellite Store opened by the developer is $10,000. These initial franchise fees for stores opened up to the Minimum Development Quota are protected from future increases, even if Big Apple Bagels raises the fees for new franchisees. If the developer opens more stores than required by the Minimum Development Quota, either within or outside the Exclusive Development Area, they will be required to pay the then-current initial franchise fee, which may differ from the previously stated $15,000.
The Minimum Development Quota is defined as the cumulative number of signed leases the developer must have within the Exclusive Development Area for Big Apple Bagels Production Stores or Big Apple Bagels Satellite Stores. This structure incentivizes area developers to open multiple locations, with the development fee acting as a commitment to that expansion. Prospective developers should carefully consider the Minimum Development Quota and the associated costs before entering into an Area Development Agreement with Big Apple Bagels.