What obligations of the Developer to Big Apple Bagels continue after the expiration or termination of the Development Agreement?
Big_Apple_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
ght to cure a breach under Paragraph 10.A.(5) within thirty (30) days after delivery of Franchisor's notice of termination.
11. EFFECTS OF TERMINATION AND EXPIRATION
- A. Loss of Rights and Exclusivity. Upon termination or expiration of this Agreement, Developer loses the right to open any additional BAGELS Stores. Developer also loses exclusive rights to the Exclusive Area described in Paragraph 2.A. and Rider A, and Franchisor may thereafter grant franchises for any BAGELS Stores anywhere in said Exclusive Area. Developer also loses exclusive rights to any wholesale business in the Exclusive Area. Developer is not entitled a refund or credit of his Development Fee.
- B. Continuing Obligations. All obligations of Franchisor and Developer under this Agreement which expressly or by their nature survive the expiration or termination of this Agreement shall continue in full force and effect subsequent to and notwithstanding the expiration or termination of this Agreement and until they are satisfied in full or by their nature expire.
- C. Covenant Not To Compete. Upon termination or expiration of this Agreement, Developer agrees that for a period of two (2) years, commencing on the effective date of expiration or termination of this Agreement, or the date on which all persons restricted by this Paragraph begin to comply with this Paragraph, whichever is later, Developer (and its shareholders, partners, or member) will not have any interest as an owner, partner, director, officer, employee, consultant, representative, agent, lender, lessor, or in any other capacity, in any Competitive Business operating within a ten (10) mile radius of the Exclusive Area or within ten (10) miles of any other franchisee of Franchisor, or of any company-owned or affiliate-owned BAGELS Store or My Favorite Muffin Store, except for BAGELS Stores and My Favorite Muffin Stores operated under Franchise Agreements granted by Franchisor and the ownership of securities listed on a stock exchange or traded on the over-the-counter market that represent three percent (3%) or less of that class of securities. For purposes of this Paragraph 11, "Competitive Business" shall mean the sale of sale of bagels, cream cheeses, muffins, sandwiches, and/or coffee, as well as any other items or products that Developer is authorized to sell subsequent to the date of this Agreement, to the public through retail or wholesale channels of distribution.
Notwithstanding anything contained in this Agreement to the contrary, or in the event of termination or expiration of this Agreement, the covenants not to compete set forth in each franchise agreement
executed by Developer shall continue in full force and effect for the duration of the time periods and for the geographic limits applicable to each such franchise agreement.
12. ASSIGNMENT
- A. By Franchisor.
Source: Item 23 — RECEIPTS (FDD pages 87–319)
What This Means (2025 FDD)
According to Big Apple Bagels' 2025 Franchise Disclosure Document, several obligations of the Developer continue after the expiration or termination of the Development Agreement. All obligations of the Franchisor and Developer that expressly or by their nature survive the expiration or termination of the agreement remain in effect until they are fully satisfied or naturally expire. This means that any duties or responsibilities outlined in the agreement that are intended to extend beyond the agreement's term will continue to bind both parties.
One significant continuing obligation is the covenant not to compete. For two years following the termination or expiration of the Development Agreement, the Developer (including its shareholders, partners, or members) is restricted from having any interest in a Competitive Business within a ten-mile radius of the Exclusive Area or any other Big Apple Bagels or My Favorite Muffin store. A Competitive Business is defined as one that sells bagels, cream cheeses, muffins, sandwiches, and/or coffee, or any other items the Developer was authorized to sell during the agreement. This restriction applies to various roles, including owner, partner, director, officer, employee, consultant, or lender.
Furthermore, the Developer must respect Big Apple Bagels' trademarks (referred to as "Marks"). The developer acknowledges that they have no interest in the Marks and that their right to use them comes solely from the Franchise Agreements. Even after termination or expiration, the Developer cannot identify themselves or any business as a franchisee or former franchisee of Big Apple Bagels, nor can they use any Mark or similar branding, except for Big Apple Bagels stores operated under existing Franchise Agreements. All goodwill associated with the Marks inures to the benefit of Big Apple Bagels. These stipulations ensure that the brand's identity and market position are protected even after the Development Agreement concludes.