Does Big Apple Bagels have a right of first refusal to acquire a franchisee's Big Apple Bagels business?
Big_Apple_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Provision in Franchise Agreement (unless otherwise specified) | Summary |
|---|---|---|
| n. Franchisor's right of first refusal to acquire Franchisee’s business | Paragraph 14.e. | BAB can match any offer for your business or an ownership interest in you |
| o. Franchisor's option to | Paragraph 17.f. | BAB can purchase tangible assets, assignment of all licenses and |
| purchase Franchisee’s | permits, on termination or expiration for the formula price described in | |
| business | the Franchise Agreement | |
| Provision | Provision in Area Development Agreement | Summary |
| n. Franchisor's right of first refusal to acquire Franchisee's business | Paragraph 12.D. | BAB can match any offer for your Area Development rights or an ownership interest in you |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 69–75)
What This Means (2025 FDD)
According to Big Apple Bagels's 2025 Franchise Disclosure Document, Big Apple Bagels does retain a right of first refusal. Specifically, Big Apple Bagels has the ability to match any offer a franchisee receives for their business or for an ownership interest in the franchisee's business. This applies to both the standard Franchise Agreement and the Area Development Agreement.
For a prospective franchisee, this means that if they decide to sell their Big Apple Bagels franchise, they must first offer Big Apple Bagels the opportunity to purchase the business on the same terms as any third-party offer. This right allows Big Apple Bagels to maintain control over who enters the franchise system and to potentially consolidate ownership.
This is a fairly common practice in franchising. It gives the franchisor the ability to ensure that any new owners meet their standards and are a good fit for the brand. While it might limit a franchisee's options in selling to the highest bidder, it also protects the overall brand and the interests of other franchisees.
The FDD also indicates that Big Apple Bagels has an option to purchase the franchisee's tangible assets and assignment of licenses and permits upon termination or expiration of the agreement, based on a formula price described in the Franchise Agreement. This is separate from the right of first refusal during a sale and is triggered specifically at the end of the franchise relationship.