What are the payment obligations of the licensees to Big Apple Bagels?
Big_Apple_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
As of the date of this disclosure document, there are 3 license agreements between BAB and 3 licensees for a Big Apple Bagels Store; those stores are located in Naperville, Illinois, Sun Prairie, Wisconsin, and Castro Valley, California. The Big Apple Bagels store in Naperville, Illinois was originally owned by the founder of the Big Apple Bagels proprietary bagel recipes and cream cheese spread recipes as well as the brand name. The license agreement, when the franchise concept was launched, provided that the Naperville store would continue to be able to operate and use all the Marks in use by BAGELS franchisees without paying any royalties or Marketing Fees. The Wisconsin licensee was originally a BAB franchisee, but converted to a licensee in 2019 upon expiration of its franchise agreement with BAB. The California licensee was originally a BAB franchisee, but
converted to a licensee in 2023 upon expiration of its franchise agreement with BAB. None of the 3 licensees pays BAB royalties or Marketing Fees.
BAB is also the licensor of 1 License Agreement for a My Favorite Muffin Store located in North Brunswick, New Jersey.
As of the issuance date of this disclosure document, we do not offer license agreements for any brands.
BAB may in the future enter into license agreements with third parties granting them the right to sell one or more Branded Products within an area of their outlets devoted to the sale of Branded Products. The sale of Branded Products by such third parties will constitute a relatively small percentage (less than 20%) of their total sales.
Source: Item 1 — THE FRANCHISOR, AND ANY PARENTS, PREDECESSORS AND AFFILIATE (FDD pages 10–15)
What This Means (2025 FDD)
According to the 2025 Big Apple Bagels Franchise Disclosure Document, licensees have specific payment arrangements with the company. As of the date of the disclosure, there are three license agreements in place for Big Apple Bagels stores located in Naperville, Illinois; Sun Prairie, Wisconsin; and Castro Valley, California. These agreements originated under varying circumstances, with the Naperville store linked to the founder's original recipes and brand. The Wisconsin and California licensees converted from franchisees to licensees upon the expiration of their franchise agreements in 2019 and 2023, respectively.
Importantly, the key detail regarding payment obligations is that none of these three licensees are required to pay Big Apple Bagels royalties or marketing fees. This arrangement is a notable deviation from the typical franchise model, where ongoing royalties and marketing contributions are standard. The FDD also mentions a license agreement for a My Favorite Muffin store in North Brunswick, New Jersey, but does not specify the payment terms for that license.
It's also worth noting that Big Apple Bagels may enter into future license agreements allowing third parties to sell branded products within their existing outlets, provided that these sales constitute a relatively small percentage (less than 20%) of their total revenue. The FDD does not specify the payment terms for these potential future licensees. Prospective franchisees should inquire about the specific terms and conditions of any future licensing agreements, as these could differ significantly from the current arrangements.