Does Big Apple Bagels require a Collateral Assignment of Lease?
Big_Apple_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
h has for any reason been disapproved by Franchisor. Franchisee shall deliver a copy of the signed lease to Franchisor within fifteen (15) days of execution thereof.
iv. Franchisee shall execute a Collateral Assignment of Lease, attached hereto as Rider B, by which Franchisee assigns to Franchisor all of his right, title and interest as tenant under the lease for the BAGELS Store premises. The assignment is for collateral purposes and may be exercised only upon a default by Franchisee under his lease or under this Agreement. Franchisor's approval of Franchisee's lease is conditioned on receipt of the signed Collateral Assignment.
v.
Source: Item 22 — CONTRACTS (FDD pages 86–87)
What This Means (2025 FDD)
According to Big Apple Bagels' 2025 Franchise Disclosure Document, a franchisee is required to execute a Collateral Assignment of Lease. This assignment transfers all of the franchisee's rights, title, and interest as a tenant under the lease for the Big Apple Bagels store premises to the franchisor.
The purpose of this Collateral Assignment of Lease is to provide collateral to Big Apple Bagels, which can be exercised if the franchisee defaults under the lease or the Franchise Agreement. The franchisor's approval of the franchisee's lease is contingent upon receiving the signed Collateral Assignment.
This requirement means that if a Big Apple Bagels franchisee defaults on their lease or Franchise Agreement, Big Apple Bagels has the right to take over the lease and operate the store at that location. This protects Big Apple Bagels' interest in maintaining a presence in that market and ensuring the continued operation of the franchise. The franchisee must also ensure that any lease they enter into has not been disapproved by Big Apple Bagels.