Are the rights of Big Apple Bagels and the franchisee cumulative under the Franchise Agreement?
Big_Apple_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
- b. Restrictions Upon Franchisee's Channels of Distribution. Franchisee is restricted solely to the retail sale of products sold under this Agreement. Franchisee is expressly prohibited from engaging in the wholesale distribution of products under this Agreement, unless Franchisee and Franchisor have entered into a Wholesale Program Addendum. Franchisee is expressly prohibited from engaging in a catering service selling Branded Products under this Agreement, unless Franchisee and Franchisor have entered into a Catering Program Addendum. The rights herein granted to Franchisee are specifically limited to the operation of business from the BAGELS Store location. Franchisee shall not independently solicit for business, promote the business, and/or offer and sell products authorized under this Agreement through the use of a toll-free number, catalog, any electronic service including the Internet, Social Media, Mobile Application or Digital Marketing (as defined below in Paragraph 9.o).
- c. Rights Reserved By Franchisor. Except as otherwise provided herein, Franchisor (on behalf of itself and its Affiliates) retains the right, in its sole discretion and without granting any rights to Franchisee:
- i. to operate, or to grant other persons the right to operate, BAGELS Stores at such locations and on such terms and conditions as Franchisor deems appropriate; and
- ii. to sell the products and services authorized for BAGELS Stores under the Marks or other trademarks, service marks and commercial symbols through similar or dissimilar channels of distribution and pursuant to such terms and conditions as Franchisor deems appropriate.
- iii. to acquire or be acquired by a company establishing businesses identical or similar to the BAGELS Store, even if the other business operates, franchises, and/or licenses competitive businesses anywhere, including in close proximity to the BAGELS Store.
Source: Item 22 — CONTRACTS (FDD pages 86–87)
What This Means (2025 FDD)
Based on the 2025 Big Apple Bagels Franchise Disclosure Document, the rights granted to the franchisee are specifically limited to the operation of the business from the designated Big Apple Bagels store location. Unless a Wholesale Program Addendum or Catering Program Addendum is in place, the franchisee is restricted solely to retail sales and is prohibited from engaging in wholesale distribution or catering services using branded products.
Big Apple Bagels, on the other hand, retains certain rights, including the ability to operate or grant others the right to operate Big Apple Bagels stores at any location and under any terms they deem appropriate. They also reserve the right to sell products and services authorized for Big Apple Bagels stores through any distribution channels and under any terms they consider appropriate. Additionally, Big Apple Bagels has the right to acquire or be acquired by companies that establish similar businesses, even if those businesses compete with existing Big Apple Bagels stores.
In essence, the rights are not cumulative. Big Apple Bagels retains broad rights to operate and expand its business through various channels, while the franchisee's rights are limited to the specific store location and retail sales, unless additional agreements are in place for wholesale or catering services. This means a franchisee's rights are quite defined and do not expand automatically, while Big Apple Bagels maintains the flexibility to develop its brand and distribution as it sees fit.