Under the Big Apple Bagels assignment agreement, what rights does the COMPANY retain?
Big_Apple_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
ment, at a reasonable commercial rental rate, as determined by a licensed commercial real estate broker selected by Assignee.
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- Assignor represents and warrants to Assignee that it has full power and authority to so assign the Lease and its interest therein and that Assignor has not previously, and is not obligated to, assign or transfer any of its interest in the Lease or the premises demised thereby.
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- Upon a default by Assignor under the Lease or under the Franchise Agreement for a BAGELS Store to be operated at the Premises, between Assignee and Assignor (the "Franchise Agreement"), or in the event of a default by Assignor under any document or instrument securing said Franchise Agreement, Assignee shall have the right and is hereby empowered to take possession of the Premises, expel Assignor therefrom, and, in such event, Assignor shall have no further right, title or interest in the Lease.
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- Assignor agrees that it will not suffer or permit any surrender, termination, amendment or modification of the Lease without the prior written consent of Assignee.
Source: Item 22 — CONTRACTS (FDD pages 86–87)
What This Means (2025 FDD)
According to Big Apple Bagels' 2025 Franchise Disclosure Document, the company, BAB Systems, Inc., retains several rights under the Collateral Assignment of Lease agreement. Specifically, if the franchisee defaults on the lease or the Franchise Agreement, Big Apple Bagels has the right to take possession of the premises and expel the franchisee, at which point the franchisee loses all rights to the lease.
Additionally, the franchisee cannot surrender, terminate, amend, or modify the lease without Big Apple Bagels' prior written consent. This provision ensures that Big Apple Bagels maintains control over the lease terms and the location of the franchise.
Furthermore, if the franchisee owns the land and/or building where the Big Apple Bagels store is located, Big Apple Bagels has the option to lease the premises on a triple-net basis for the remainder of the Franchise Agreement term. The rental rate will be a reasonable commercial rate determined by a licensed commercial real estate broker selected by Big Apple Bagels. This protects Big Apple Bagels' continued operation at that location.