Under what conditions can Big Apple Bagels terminate a Franchise Agreement with cause?
Big_Apple_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Provision in Franchise Agreement (unless otherwise specified) | Summary |
|---|---|---|
| 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. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 69–75)
What This Means (2025 FDD)
According to the 2025 Big Apple Bagels Franchise Disclosure Document, Big Apple Bagels can terminate a Franchise Agreement with cause if the franchisee commits any one of several listed violations, as detailed in Section 16 of the Franchise Agreement. These violations are categorized into curable and non-curable defaults. For curable defaults, the franchisee has a specific timeframe to remedy the issue, whereas non-curable defaults lead to immediate termination.
Curable defaults include monetary defaults and failure to maintain required insurance, for which the franchisee has 10 days to correct the issue. For all other defaults not specifically listed in Paragraph 16.a, the franchisee has 30 days to cure the default. Non-curable defaults, which allow Big Apple Bagels to terminate the agreement immediately, include failure to submit a site within 90 days, failure to open the store within 4 months of taking possession, failure to complete initial training, abandonment of the franchise, conviction of a felony, unauthorized transfers of the franchise, unauthorized use or disclosure of confidential information or the BAGELS Operations Manual, unauthorized use of the Marks, creating a threat to public health or safety, repeated defaults (even if cured), unapproved transfer upon the franchisee's death or permanent incapacity, failure to comply with covenants in Paragraph 9.f, and termination of any other agreement between Big Apple Bagels and the franchisee.
Prospective franchisees should pay close attention to these termination conditions, as they outline the circumstances under which they could lose their franchise. Understanding the difference between curable and non-curable defaults is crucial. Curable defaults provide an opportunity to rectify the situation and maintain the franchise, while non-curable defaults result in immediate termination. Franchisees should ensure they have systems in place to prevent both types of defaults to protect their investment and the ongoing operation of their Big Apple Bagels franchise.
It is also important to note that this termination information pertains to the standard Franchise Agreement. The FDD also outlines conditions for termination of the Preliminary Agreement, which occurs if the franchisee fails to sign a Franchise Agreement within 14 days of Big Apple Bagels' approval of the site or if the franchisee fails to sign the Preliminary Agreement and pay the deposit within 14 days of receiving it.