Under the Big Apple Bagels assignment agreement, what is the 'Agreement' referring to?
Big_Apple_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
| This Security Agreement dated is by and between | ||
|---|---|---|
| BAB Systems, Inc., an Illinois corporation, of 500 Lake Cook Road, Suite 475, Deerfield, Illinois | ||
| 60015 | ("Secured Party") and | |
| , whose principal place of business is ("Debtor"). RECITALS | ||
| A. | Debtor is a franchisee under a Franchise Agreement dated ("Franchise Agreement") with Secured Party as Franchisor, pursuant to which Franchise Agreement Debtor has ongoing monetary and non-monetary obligations to Secured Party. | |
| B. | Debtor has locations at which Debtor operates businesses known as "Big Apple Bagels" ("BAGELS Stores"), pursuant to the Franchise Agreement; the addresses of the locations are listed on Schedule "A" attached hereto and incorporated herein by reference. | |
| C. | Debtor is giving Secured Party a security interest in the collateral described in this | |
| Agreement. | NOW THEREFORE, in consideration of the several and mutual covenants set forth herein, and for other good and valuable consideration, |
Source: Item 22 — CONTRACTS (FDD pages 86–87)
What This Means (2025 FDD)
According to Big Apple Bagels' 2025 Franchise Disclosure Document, the term "Agreement" in the context of assigning a lease refers to the Franchise Agreement between BAB Systems, Inc. (the Assignee) and the franchisee (the Assignor). This is detailed within the Collateral Assignment of Lease section.
Specifically, the document states that upon a default by the Assignor (franchisee) under the Lease or under the Franchise Agreement for a Big Apple Bagels store, BAB Systems, Inc. has the right to take possession of the premises. This clause ensures that Big Apple Bagels retains control over the store's location if the franchisee fails to meet their obligations under either the lease or the Franchise Agreement.
This arrangement is a security measure for Big Apple Bagels, allowing them to protect their brand and operational standards by maintaining control over the store's premises in case of franchisee default. Prospective franchisees should understand that this collateral assignment of lease is a standard practice to safeguard the franchisor's interests and ensure the continuity of the Big Apple Bagels business.