Under what condition can Big Apple Bagels require a franchisee to discontinue the use of a Mark?
Big_Apple_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
- e. Discontinuance of Use of Marks. If it becomes advisable at any time, in Franchisor's sole discretion, for Franchisor and/or Franchisee to modify or discontinue use of any Mark, and/or use one or more substitute trademarks or service marks, Franchisee agrees to comply therewith within a reasonable time after notice thereof by Franchisor and Franchisor's sole obligation shall be to reimburse Franchisee for his out-of-pocket expenses of complying with these obligations.
Source: Item 22 — CONTRACTS (FDD pages 86–87)
What This Means (2025 FDD)
According to Big Apple Bagels' 2025 Franchise Disclosure Document, Big Apple Bagels has the right to ask a franchisee to modify or discontinue the use of any Mark. This decision is based on Big Apple Bagels' sole discretion, meaning they don't need a specific reason beyond their own judgment. If Big Apple Bagels decides to make such a change, the franchisee must comply within a reasonable timeframe after receiving notice from Big Apple Bagels.
In the event that Big Apple Bagels requires a franchisee to discontinue the use of a mark, Big Apple Bagels will reimburse the franchisee for their out-of-pocket expenses incurred as a direct result of complying with this requirement. However, this reimbursement is limited to direct expenses only; Big Apple Bagels will not cover any consequential damages such as lost revenue or profits.
This clause protects Big Apple Bagels' ability to update or change its branding and trademarks as needed. While franchisees must comply with these changes, the provision for reimbursement of out-of-pocket expenses offers some financial protection to franchisees who may incur costs to implement these changes, such as updating signage or marketing materials. Franchisees should seek clarity regarding what constitutes 'reasonable time' and 'out-of-pocket expenses' to avoid potential disputes.