factual

Are there any specified conditions for Big Apple Bagels' approval of an Area Developer's transfer?

Big_Apple_Bagels Franchise · 2025 FDD

Answer from 2025 FDD Document

Provision Provision in Franchise Agreement (unless otherwise specified) Summary
a. Length of the franchise Paragraph 2.a. 10 years
term
b .Renewal or extension of Paragraph 2.b. If you are in good standing, you can renew on the then current terms
the term
c. Requirements for Franchisee to renew or extend Paragraph 2.b. Pay renewal fee of $2,500, maintain premises or secure substitute premises, remodel, sign new agreement and other documents and sign release, and agree to upgrade to then-current standards of decor, equipment, and product offerings. The renewal agreement may contain materially different terms and conditions than your original contract, but the royalty fee will not be greater than the royalty fee that we then impose on similarly-situated renewing franchisees
d. Termination by Section 15 Breach by BAB, you in compliance. Additionally, you may terminate
Franchisee the agreement under any grounds permitted by law.
e. Termination by Not Applicable BAB cannot terminate your Franchise Agreement without cause
Franchisor without cause
f. Termination by Section 16 BAB can terminate only if you commit any 1 of several listed
Franchisor with cause violations
g. "Cause" defined – curable faults Section 16 You have 10 days for monetary defaults and failure to maintain required insurance, and 30 days for all defaults not listed in Paragraph 16.a.
h. "Cause" defined – non- curable defaults Section 16 Failure to submit site within 90 days, failure to open Store in 4 months of possession, failure to complete initial training, abandonment, conviction of felony, unauthorized transfers, unauthorized use or disclosure of confidential information or BAGELS Operations Manual, unauthorized use of Marks, creation of a threat to public health or safety, repeated defaults (even if cured), unapproved transfer upon your death or permanent incapacity, failure to comply with covenants in Paragraph 9.f; termination of other agreement between BAB and you.
i. Franchisee’s obligations on termination/ nonrenewal Section 17 t Franchise Agreement: Pay outstanding amounts, complete de- identification, return confidential information, covenant not to compete, continuing obligations, BAB option to purchase.
j. Assignment of contract Paragraph 14.a. No restrictions on BAB's right to assign
by Franchisor
k. "Transfer" by Franchisee Paragraph 14.b Includes transfer of any interest in Franchise Agreement, assets or
– definition ownership change in you
Provision Provision in Franchise Agreement (unless otherwise specified) Summary
l. Franchisor's approval of Paragraph 14.c. Franchise Agreement: BAB has right to approve all transfers, but will
transfer by Franchisee not unreasonably withhold consent.
m. Conditions for Franchisor's approval of transfer Paragraph 14.b.,14.c. Transferee qualifies, all obligations assumed by transferee, all amounts due BAB are paid, transferee completes training, transfer fee paid, general release signed, you agree to guarantee performance and obligations of transferee, transferee signs, at BAB's sole discretion, either: (a) BAB's assignment and assumption agreement or (b) BAB's then-current Franchise Agreement, which may contain materially different terms than your Franchise Agreement
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
p. Death or disability or Paragraph 14.c. Franchise or ownership interest in you must be assigned to approved
Franchisee buyer within 6 months
q. Non-competition Paragraph 9.f. No involvement in competing business anywhere
covenants during the term
of the franchise
r. Non-competition covenants after the franchise is terminated or expires Paragraph 17.d. No competing business for 2 years at the Store location or within 10 miles of your Store or any other BAGELS Store or My Favorite Muffin Store (same restrictions after assignment)
s. Modification of the Paragraph 18.b. and 18.i. No modifications generally, but BAGELS Operations Manual and
agreement standards and specifications subject to change
t. Integration/merger clause Paragraph 18.j. Terms of Franchise Agreement (including exhibits, attachments, BAGELS Operations Manual, and other written materials) are binding (subject to state law). Any representations or promises made outside the disclosure document, franchise agreement and development agreement may not be enforceable. Notwithstanding the foregoing, nothing in any agreement is intended to disclaim the express representations made in the Franchise Disclosure Documents, its exhibits and amendments. (subject to applicable state law)
u. Dispute resolution by arbitration or mediation Paragraph 18.l. In accordance with the American Arbitration Association in the major city nearest where our principal office address is then located (currently it would be Chicago, Illinois). Subject to applicable state law
v. Choice of forum Paragraph 18.l. Arbitration must be in Illinois (subject to applicable state law)
Provision Provision in Area Development Agreement Summary you and BAB, or if you terminate a Franchise Agreement without cause, Termination of the Area Development Agreement which does not involve a default of a Franchise Agreement does not subject the Franchise Agreement to termination by BAB.
i. Franchisee’s obligations Section 11 All of which expressly or by nature survive expiration or termination
on termination/ nonrenewal and covenant not to compete
j. Assignment of contract Paragraph 12.A. No restriction on BAB's right to assign
by Franchisor
k. Transfer by Franchisee – Not Applicable Not Applicable
definition
l. Franchisor's approval of Paragraph 12.B. Only with prior written approval by BAB
assignment by Franchisee
m. Conditions for Paragraph 12.B. Conditions not specified.
Franchisor's approval of
transfer

Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 69–75)

What This Means (2025 FDD)

According to Big Apple Bagels' 2025 Franchise Disclosure Document, the conditions for the franchisor's approval of a transfer by an Area Developer are not specified in Paragraph 12.B of the Area Development Agreement. This means that the FDD does not explicitly list out the requirements or criteria that Big Apple Bagels will use to evaluate and approve a proposed transfer of area development rights.

For a potential Area Developer, this lack of specificity introduces some uncertainty. While Big Apple Bagels retains the right to approve or deny a transfer, the absence of defined conditions means the decision could be based on factors not clearly outlined in the agreement. This differs from the Franchise Agreement, which does list conditions for transfer.

Therefore, it is crucial for prospective Area Developers to engage in thorough due diligence. They should directly ask Big Apple Bagels to clarify what conditions or criteria they will consider when evaluating a transfer request. Understanding these unwritten expectations is vital before entering into an Area Development Agreement to avoid potential roadblocks or disputes in the future if the Area Developer wishes to transfer their rights.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.
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