What is the obligation of Big Apple Bagels franchisees regarding the purchase of cream cheese?
Big_Apple_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
f coffee purchased by you from the designated source.
You must purchase your cream cheese, either in block form or prepackaged spreads, from our designated supplier. BAB, Inc. will derive revenue in the form of a license fee on your purchases of cream cheese from the designated source under a licensing agreement between BAB, Inc., an affiliate of BAB, and the designated source. The license fee is a certain amount for each pound of cream cheese purchased by you from the designated source.
If you are a BAGELS Satellite Store franchisee, the bagels sold in your Store must be supplied by your own BAGELS Production Store.
You must purchase BAB's proprietary muffin mix for My Favorite Muffin branded muffins. You must purchase this proprietary muffin mix and other bakery products from suppliers designated by BAB.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 35–38)
What This Means (2025 FDD)
According to Big Apple Bagels's 2025 Franchise Disclosure Document, franchisees are required to purchase cream cheese from a designated supplier. This requirement applies whether the cream cheese is in block form or prepackaged spreads. Big Apple Bagels, Inc. receives revenue in the form of a license fee based on the franchisee's purchases of cream cheese from this designated source. In the fiscal year ending November 30, 2024, Big Apple Bagels, Inc. derived $2,849 in license fee revenue from cream cheese purchases.
This designated supplier requirement is a common practice in franchising, allowing Big Apple Bagels to maintain quality control and consistency across all franchise locations. By mandating a specific supplier, Big Apple Bagels can ensure that the cream cheese used in all its stores meets certain standards.
For a prospective franchisee, this means they will not be able to source cream cheese from any supplier of their choosing. They must factor in the cost of purchasing cream cheese from the designated supplier when projecting their operating expenses. It is important to note that Big Apple Bagels benefits financially from these purchases through license fees, which may influence their choice of designated supplier. Franchisees should inquire about the specific terms of the licensing agreement and the process for supplier approval to ensure they understand the full implications of this requirement.