Under what conditions can Big Apple Bagels terminate the Area Development Agreement?
Big_Apple_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
y operate to customers regardless of their location.
C. AREA DEVELOPMENT AGREEMENT
You will receive an exclusive territory under the Area Development Agreement so long as you comply with your obligations under that Agreement, including meeting your Development Obligations by opening the required number of Stores. If you fail to meet your obligations, we have the right to terminate your Area Development Agreement. In that event, you will lose the right to open any additional BAGELS Stores. You will also lose exclusive rights to the Exclusive Area described in the Area Development Agreement, and we may thereafter grant franchises for any BAGELS Stores anywhere in said Exclusive Area. You also lose exclusive rights to any wholesale business in the Exclusive Area.
(1) Size of Protected Development Area
The Area Development Agreement grants Developer certain rights (as described below) within a designated geographical area (the "Protected Development Area") to be described in Rider A attached to the Area Development Agreement. The size of the Protected Development Area will vary,
based on the market potential and BAB's analysis of the financial and operational capabilities of Developer. It may be 1 or more counties in rural areas or a portion of a metropolitan statistical area in heavily populated major cities. The Protected Development Area is not based upon a minimum population.
Source: Item 12 — TERRITORY (FDD pages 54–56)
What This Means (2025 FDD)
According to Big Apple Bagels's 2025 Franchise Disclosure Document, the Area Development Agreement can be terminated if the developer fails to meet their obligations, including meeting the development obligations by opening the required number of stores.
In the event of termination, the developer will lose the right to open any additional Big Apple Bagels stores. They will also lose exclusive rights to the Exclusive Area described in the Area Development Agreement, and Big Apple Bagels may then grant franchises for any Big Apple Bagels stores anywhere in said Exclusive Area. The developer also loses exclusive rights to any wholesale business in the Exclusive Area.
The continuation of the developer's protected area is not dependent on achieving a certain sales volume or market penetration or other contingency except for meeting the development obligations. During the term of the Area Development Agreement and any extensions, the developer must have signed leases for certain cumulative numbers of Big Apple Bagels Stores at the end of each Development Period and must have each store open and operating within 120 days from the date the Developer acquires possession of the site.