What is the relationship between the Big Apple Bagels franchisor and franchisee defined as in the agreement?
Big_Apple_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
20. ACKNOWLEDGEMENTS and REPRESENTATIONS. Franchisee acknowledges and/or represents the following:
- a. That the terms, conditions and covenants contained in this Agreement are reasonably necessary to maintain Franchisor's high standards of quality and service and thereby to protect and preserve the goodwill of the Marks and the System;
- b. That he has conducted an independent investigation of the business venture contemplated by this Agreement and recognizes that it involves business risks;
- c. That Franchisor is primarily engaged in the business of licensing rights and is not engaged in the business of owning or operating a "Big Apple Bagels."
- d. That Franchisee shall operate the Franchised Business for itself and not for Franchisor, and that Franchisee shall provide products and services for its customers and not for Franchisor;
- e. That Franchisor is not Franchisee's employer or an employer of any of Franchisee's employees, and further, that Franchisor is not a "joint employer" with Franchisee.
- f. That Franchisee shall be sole employer of its employees and unless a critical need arises, Franchisor shall not have access to Franchisee's employer or employee records;
- g. That Franchisee's use of the POS System and its capability to report labor cost as a percentage of sales does not constitute any control or influence by Franchisor over the Franchisee's employees' terms or conditions of employment;
Source: Item 22 — CONTRACTS (FDD pages 86–87)
What This Means (2025 FDD)
According to Big Apple Bagels' 2025 Franchise Disclosure Document, the relationship between the franchisor and franchisee is defined as one where the franchisee operates independently. Big Apple Bagels is primarily in the business of licensing rights and not in the business of operating Big Apple Bagels stores. The franchisee operates the franchised business for themselves, providing products and services to their customers, not to Big Apple Bagels itself.
The agreement explicitly states that Big Apple Bagels is not the employer of the franchisee or the franchisee's employees, nor are they a joint employer. The franchisee is solely responsible for their employees. Unless a critical need arises, Big Apple Bagels does not have access to the franchisee's employer or employee records. The use of a POS system that reports labor costs as a percentage of sales does not constitute control or influence by Big Apple Bagels over the franchisee's employees' terms or conditions of employment.
The franchisee acknowledges that the terms and conditions of the agreement are necessary to maintain Big Apple Bagels' standards and protect the goodwill of its marks and system. The franchisee also confirms they have conducted their own independent investigation of the business venture and recognize the associated business risks. This reinforces the understanding that the franchisee is an independent operator responsible for their own business decisions and outcomes.