What rights does the prospective franchisee have if they become an Area Developer for Big Apple Bagels?
Big_Apple_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
- B. Rights During Development Periods. Provided Developer: (i) is in full compliance with the terms and conditions contained in this Agreement, including without limitation, the development obligations contained in Paragraph C of this Section 3; and (ii) is in full compliance with all obligations under all Franchise Agreements heretofore or hereafter entered into with Franchisor; then during the Development Periods, Franchisor: (1) will grant to Developer, in accordance with the provisions of Section 5 hereof, franchises for the ownership and operation of BAGELS Stores located within the Exclusive Area; and (2) will not operate (directly or through an affiliate), nor grant a franchise for the operation of, any BAGELS Stores to be located within the Exclusive Area, except such franchises as are granted to Developer.
- C. Development Obligations. Developer agrees during the term of this Agreement and any extensions thereof that he will at all times faithfully, honestly, and diligently perform his obligations hereunder and that he will continuously exert his best efforts to promote and enhance the development of BAGELS Stores within the Exclusive Area. Without limiting the foregoing obligation, Developer agrees to have signed leases within the Exclusive Area for the cumulative number of BAGELS Production Stores or BAGELS Satellite Stores at the end of each Development Period set forth in Section 4 of Rider B hereof ("Minimum Development Quota") and to have each
Source: Item 23 — RECEIPTS (FDD pages 87–319)
What This Means (2025 FDD)
According to Big Apple Bagels' 2025 Franchise Disclosure Document, an Area Developer gains specific rights during the Development Periods, provided they fully comply with the terms of the Area Development Agreement and all Franchise Agreements. Big Apple Bagels will grant the Area Developer franchises for operating Big Apple Bagels stores within the Exclusive Area, as defined in Rider A of the agreement. The franchisor commits not to operate or franchise any other Big Apple Bagels stores within the Exclusive Area, except for those granted to the Area Developer. This exclusivity is a key benefit for the developer, allowing them to establish and grow their network of stores without direct competition from the franchisor or other franchisees within their territory. The initial franchise fee will be as set forth in Paragraph 6.B.
The Area Developer is obligated to diligently promote and enhance the development of Big Apple Bagels stores within their Exclusive Area. This includes signing leases for a cumulative number of Big Apple Bagels Production Stores or Big Apple Bagels Satellite Stores by the end of each Development Period, meeting the Minimum Development Quota outlined in Section 4 of Rider B. These obligations ensure that the developer is actively working to expand the Big Apple Bagels brand within their territory. The developer's rights to use Big Apple Bagels' trademarks are derived solely from the Franchise Agreements and any goodwill from that usage benefits the franchisor.
However, Big Apple Bagels retains certain rights, including the ability to operate or franchise stores outside the Exclusive Area and to sell authorized services and products through other channels of distribution. Upon termination or expiration of the Area Development Agreement, the developer loses the right to open additional Big Apple Bagels stores and the exclusive rights to the Exclusive Area and any wholesale business within it. The franchisor can then grant franchises to others within the former Exclusive Area. The developer is not entitled to a refund of their Development Fee upon termination or expiration of the agreement.
In summary, becoming an Area Developer for Big Apple Bagels offers the right to develop and operate stores within an exclusive territory, but it also comes with significant obligations and the risk of losing exclusivity and development rights upon termination or expiration of the agreement. Additionally, the developer is subject to a covenant not to compete for two years within a ten-mile radius of the Exclusive Area or any other Big Apple Bagels or My Favorite Muffin store, except for stores operated under a franchise agreement with Big Apple Bagels.