What is Big Apple Bagels' obligation if a franchisee is required to discontinue using a Mark?
Big_Apple_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
- e. Discontinuance of Use of Marks. If it becomes advisable at any time, in Franchisor's sole discretion, for Franchisor and/or Franchisee to modify or discontinue use of any Mark, and/or use one or more substitute trademarks or service marks, Franchisee agrees to comply therewith within a reasonable time after notice thereof by Franchisor and Franchisor's sole obligation shall be to reimburse Franchisee for his out-of-pocket expenses of complying with these obligations.
Source: Item 22 — CONTRACTS (FDD pages 86–87)
What This Means (2025 FDD)
According to Big Apple Bagels' 2025 Franchise Disclosure Document, if it becomes necessary for a franchisee to discontinue using any Mark, Big Apple Bagels' sole obligation is to reimburse the franchisee for their out-of-pocket expenses incurred in complying with the required changes. This decision to modify or discontinue a Mark is at Big Apple Bagels' sole discretion, and the franchisee must comply within a reasonable time after receiving notice from Big Apple Bagels.
This means that while Big Apple Bagels can mandate a change in branding or trademarks, they are responsible for covering the direct costs the franchisee incurs as a result of implementing those changes. However, Big Apple Bagels is not responsible for consequential damages such as lost revenue or profits.
For a prospective franchisee, this is an important protection. While Big Apple Bagels has the right to change its Marks, franchisees are shielded from bearing the full financial burden of rebranding or updating signage and materials. Franchisees should keep detailed records of all expenses related to complying with such changes to ensure proper reimbursement from Big Apple Bagels.