Big Apple Bagels Franchise Cost, Revenue & Review 2026
- Investment
- $513K – $745K
- Disclosed sales
- $632K
- gross sales, not profit
- SBA charge-off
- 34.6%
- on 83 loans
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
Big Apple Bagels is a quick-service franchise serving fresh-baked bagels, deli sandwiches, muffins, and coffee. Franchisees run the cafes, managing on-site baking, food prep, and counter service.
FranchiseVerdict summary · 2026
A Big Apple Bagels franchise requires a total initial investment of $513K – $745K, including a $25K franchise fee and an ongoing 5.0% royalty[2]. Per the 2026 FDD, average unit revenue was $632K[2]. SBA 7(a) loans show a 34.6% charge-off rate across 83 loans[1]. FranchiseVerdict grade: C (Average), an editorial assessment, not investment advice. Run a live ROI scan →
Sources, dates and evidence
FDD issued: 2026 filing · Data extracted: · Last cited check: · Staleness risk: low - the current year's filing
Evidence: strong✓ Investment (Item 7)✓ Item 19 status✓ Units and owners (Item 20)✓ SBA loan coverage✓ Litigation (Item 3)✓ Financial statements (Item 21)✓ Franchisor identityhow this is scored6 of 7 headline figures on this page cite a page of the filing; the rest are marked “Not cited” beside the figure.
Overview
- Investment
- $513K – $745K
- 77th pct Service Resta…
- Avg gross sales
- $632K
- 8th pct Service Resta…
- Royalty
- 5.0%
- 12th pct Service Resta…
- Units
- 48
- 64th pct Service Resta…
- SBA charge-off
- 34.6%
- % of SBA 7(a) loans not repaid · median varies by category
Quick verdict · Quick-Service Restaurants · color = vs category peers
Green = favorable by >10% vs Quick-Service Restaurants median · No shading = within ±10% · Red = unfavorable by >10% · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
Bottom line
- COSTTotal investment $513K – $745K including a $25K franchise fee, 5.0% ongoing royalty.
- RETURNSAverage unit revenue of $632K/year.
- RISKVerdict C (Average), verdict score 40/100 (higher is better). SBA loan charge-off rate of 34.6% across 83 loans (well above the 16% franchise average, based on all SBA 7(a) franchise lending, 2010–2025).
- GROWTHNegative: net -1 franchised outlets in the latest year (0 opened, 1 closed) (Item 20).
- TERMSNo protected territory and the franchisor reserves the right to compete in your area. Clarify territorial boundaries before signing.
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- BAB Systems, Inc.
- Parent company
- BAB, Inc.
- FDD Item 1, page 10 of the 2026 FDD
- Predecessor
- of BAB
- Prior franchisor entity
- CEO title
- President, Chief Executive Officer and Director
- Michael W. Evans
- Incorporated in
- IL
- HQ
- 500 Lake Cook Road, Suite 475, Deerfield, Illinois 60015
- Auditor
- Sassetti LLC
- Audited financials
- Franchisor revenue
- $3.3M
- vs $3.3M prior year
Affiliated brands
- To simplify the language in this Franchise Disclosure Document
Other brands the franchisor or its parent operates (Item 1).
Same owner · FDD Item 1, page 10
2 other brands on this site name BAB, Inc. as parent or ultimate parent in their own FDD.
Grouped by the owner's name as each filing prints it (this page: the 2026 FDD). Spelling variants of the same group may be listed apart; a brand is never grouped with an owner its filing does not name.
Overview
About
- CEO
- Michael W. Evans
- Headquarters
- IL
- Founded
- 1992
- FDD year
- 2026
- States available
- 12
Can you afford it, and what does the money buy?
Entry cost runs 29% above the typical quick-service restaurants franchise.
Source: FDD 2026 · Items 5–7
Full Item 7 breakdown12 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Initial Franchise Fee | $25K | $25K | |
| Store Opening Marketing Feenot refundable | $8K | $8K | |
| Professional Feesnot refundable | $5K | $10K | |
| First Month's Rent and Security Depositnot refundable | $4K | $9K | |
| Insurancenot refundable | $5K | $9K | |
| Leasehold Improvementsnot refundable | $200K | $350K | |
| Exterior and Interior Signage and Displaynot refundable | $6K | $12K | |
| Furniture, Fixtures, Equipmentnot refundable | $230K | $275K | |
| Trainingnot refundable | $3K | $5K | |
| Prepaid Expenses, Depositsnot refundable | $500 | $2K | |
| Opening Inventory, Suppliesnot refundable | $15K | $23K | |
| Additional Funds - 3 monthsnot refundable | $12K | $18K | |
| Total initial investment | $513K | $745K |
Line items extracted from FDD Item 7. Ranges reflect the franchisor's stated low and high per line. Total is the sum of line-item lows / highs — actual costs may fall outside this range depending on market and build-out scope.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $513K – $745K
- Bottom third — review vs category
- Liquid capital req'd
- $12K – $18K
- Top 40% of category vs category
- Franchise fee
- $25K – $25K
- Top 40% of category vs category
- Royalty
- 5.0%
- typical 6–8%
- Ad fund
- 3.0%
- typical 3–5%
- Total fee load
- 8.0%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 5.0% of gross sales |
| Marketing / ad fund | 3.0% of gross sales |
| Technology fee | $95 |
| Transfer fee | $5K |
| Renewal fee | $3K |
| Inventory (initial) | $15K – $23K |
| Total fee load | 8.0% of rev |
What do units actually make?
Average unit sales run 35% below the quick-service restaurants norm.
Source: FDD 2026 · Item 19
Single-unit · not modelled
Returns at a glance
An FDD discloses gross sales, not profit, and the operating costs that turn one into the other are in no filing. We publish no modelled return for Big Apple Bagels until someone supplies them — yours, in the models below.
—
Not modelled yet
An FDD discloses gross sales, not profit. We hold no sourced figure for COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
Total invested capital · disclosed
$644K
Item 7 initial investment plus working capital, as filed — the one figure here that needs no assumption.
ROI & LBO modelsSingle-unit · 25-unit portfolio · editable
What one unit earns on your invested capital
Model A · Single-Unit Return
Computes unlevered return on invested capital (ROIC) for a single franchise unit, read against the 30–60% reference band · Yale SOM, Post-MBA Path Exhibit 2 (2023). Below that band a passive index fund likely outperforms; above it the franchisor has pricing power you're subsidizing.
Note: Item 19 revenue is what the franchisor discloses, and it is the top line only — gross sales are not profit. No FDD discloses the operating costs that turn one into the other, so those fields start empty and nothing is modelled until you supply them from your own lease quote, labor market and build-out budget.
Returns model · single-unit ROIC
What would one Big Apple Bagels unit return on the cash you put in?
Illustrative category typicals — not sourced to any filing, survey or sample. Replace them with figures from franchisee validation calls before you rely on the output.
Unlevered ROIC · per unit
Your modelled return on total invested capital, before any debt financing.
—
An FDD discloses gross sales, not profit. We hold no sourced figure for COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
What 25 units return when you use SBA financing
Model B · Return on Equity: Debt-Financed Acquisition
Models a 25-unit portfolio acquisition financed with an SBA 7(a) loan. Shows equity IRR (your return on cash invested), DSCR (how safely the cash flow covers debt service), and the capital stack (SBA + seller + equity breakdown).
This is the “search fund” or “entrepreneurship through acquisition” scenario: you buy an existing multi-unit operator, use leverage to amplify returns, and either operate or hire management. The 25-unit size is the typical minimum for an SBA-backed franchise portfolio acquisition to pencil as a full-time income.
What “return on equity” means here: if you put in $500K of your own cash and the business generates enough EBITDA to pay down debt and grow, your equity IRR is the annual return on that $500K, including the value created when you eventually sell. Target IRR for a search fund is typically 25–35%.
Not modelled yet
An FDD discloses gross sales, not profit. We hold no sourced figure for COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
A 25-unit return is built on a per-unit EBITDA. Fill in the operating costs in Model A above and this model runs on that figure, or take the whole scenario to the full ROI workbench, where the portfolio and LBO models accept your own per-unit economics directly.
These models are for research and scenario planning only. Not investment advice. Actual results depend on your specific location, management, and market conditions. Consult a franchise attorney and accountant before signing any franchise agreement.
Item 19 · Source: 2026 FDD
Financial Performance
- Avg gross sales
- $632K
- Per unit/yr · from the Item 19 franchised-cohort breakdown (no single system-wide average disclosed)
Gross sales are revenue before expenses — not profit. Actual owner earnings depend on rent, labor, royalties, marketing fees, and debt service.
- Item 19 type
- gross sales by quartile
- Sample size
- 47 outlets
- vs category median 19 · large
- Range (low → high)
- $174K→$1.4MCited, not corroborated — printed on page 77 of the 2026 FDD. Nothing else in our record independently restates or re-derives it.
- Cohort dispersion (min → max)
- Quartile band
- $365K→$923K
- Bottom 25% → top 25%
- Reporting year
- 2025
- Fiscal year the figures cover
- Source filing
- FDD 2026
- Disclosed in the 2026 filing, covering 2025
- Transparency
- 3 / 10
- vs category median 4 / 10 · below
Compared against 781 Quick-Service Restaurants brands
Operator outlook
What the numbers say
Data-driven interpretation of this brand's financial disclosures, fee structure, and system trajectory.
Unit economics
Average unit generates $632K/year in gross sales. Revenue-to-investment ratio: 1.0x.
Fee burden
Total ongoing fee load of 8.0% (near the Quick-Service Restaurants median).
Disclosure
Transparency score 3/10 — moderate disclosure depth. Average and range data are available but detailed cohort breakdowns may be limited.
Operator retention
System contracting at -2.0% CAGR over 3 years. Investigate whether closures are franchisor-driven consolidation or franchisee exits.
Source: FDD Item 19 financial performance representations and publicly filed FDD data. Past performance is not indicative of future results. Verify all figures with the franchisor and current franchisees before making any investment decision.
vs Quick-Service Restaurants medians
How Big Apple Bagels Compares
Category median of published Quick-Service Restaurants brands that report the figure; the middle half spans the 25th to 75th percentile and n counts the brands behind it. Medians are used because a few very large systems pull an average far from the typical brand. Revenue is disclosed gross sales, not profit.
Is the system healthy?
Source: FDD 2026 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 48
- Opened
- 0
- Last reporting year
- Closed
- 1
- Terminated
- 0
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 0
- Term expired, not renewed (per Item 20)
- Turnover rate
- 2.1%
- Company-owned
- 0
- Corporate units in the system
- % franchised
- 100%
- vs corporate-owned
- Net growth (3-yr)
- -2.0%
- Net unit change over 3 years
- 3-yr CAGR
- -2.0%
- Compounded over last 3 years
Last fiscal year · Item 20 exits and transfers
- Terminated
- 0
- Not renewed
- 0
- Transferred
- 2
- Reacquired
- 0
- Franchisor bought back
- Signed, not yet open
- 0
- 0.00 per open outlet · Item 20 Table 5
- Projected new
- 0
- Franchisor's next-year forecast
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 12 · 12 states reported
The Territory Map
FDD Item 12 reports the state count, but the specific list isn't in our current data. The map will appear once we re-extract from the FDD or enough franchisee contacts are available.
12
states with franchisees (per FDD Item 12)
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
- Total loans
- 83
- Loan volume
- $11.0M
- Median loan
- $128K
- 50th percentile
- Charge-off rate
- 34.6%
- on 83 loans · rates vary by category · see methodology
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- 65.4%
- 5-yr charge-off
- N/A
- Loans approved 2021+
- Active lenders
- 48
- Defaults
- 27
- Typical loan rate
- 6.8%
- avg rate to borrowers
- Franchised industry avg
- 21.5%
- brand above franchise avg ↑
- Jobs supported
- 420
- 3.8 per loan
- Lender concentration
- 7%
- top lender's share
Borrower mix: 0% went to startups / new businesses, 100% to established operators
Franchise vs independent — in limited-service restaurants, franchised businesses charge off at 21.5% vs 25.0% for independents — franchising is associated with 14% lower SBA default risk in this category.
Vintage analysis
Big Apple Bagels charge-off rate by loan vintage
Top lenders financing Big Apple Bagels franchisees
Showing 3 of 48 lenders. The full breakdown — every lender, state distribution, interest rates & risk ratings — is in the SBA Lending Report below.
Explore lender portfolios on Bank Reports or regional data on State Reports.
Lender network · 7(a) + 504
SBA Lending Report
Full lending analysis for Big Apple Bagels from SBA 7(a) FOIA data.
- Principal loss rate
- 14.5%
- Avg SBA guarantee
- 76%
- Avg interest rate
- 6.81%
- Avg chargeoff amount
- $59K
- Lender concentration
- 7.2%
- Job velocity
- 3.8 per $100K
- NAICS benchmark
- 15.7%
- NAICS 722211
- Jobs supported
- 420
Top SBA lendersTop lender holds 7% of loans
| # | Lender | Loans | Volume | Default % |
|---|---|---|---|---|
| 1 | PNC Bank, National Association | 6 | $926K | 33.3% |
| 2 | Fifth Third Bank | 6 | $956K | 66.7% |
| 3 | The Huntington National Bank | 5 | $690K | 20.0% |
| 4 | Wells Fargo Bank National Association | 4 | $415K | 100.0% |
| 5 | Union National Bank | 4 | $530K | 25.0% |
| 6 | U.S. Bank, National Association | 4 | $431K | 0.0% |
| 7 | KeyBank National Association | 3 | $230K | 0.0% |
| 8 | BMO Bank National Association | 3 | $463K | 33.3% |
| 9 | Federal Deposit Insurance Corporation | 3 | $329K | 0.0% |
| 10 | Midland States Bank | 2 | $280K | 0.0% |
Geographic failure vector
| State | Loans | Defaults | Rate |
|---|---|---|---|
| MIMichigan | 21 | 5 | 23.8% |
| ILIllinois | 12 | 4 | 33.3% |
| MNMinnesota | 7 | 1 | 20.0% |
| WIWisconsin | 7 | 2 | 40.0% |
| CACalifornia | 5 | 3 | 60.0% |
| IAIowa | 5 | 1 | 20.0% |
| INIndiana | 3 | 2 | 66.7% |
| OHOhio | 3 | 3 | 100.0% |
| COColorado | 2 | 2 | 100.0% |
| FLFlorida | 2 | 0 | 0.0% |
SBA 7(a) lending trend
Borrower profile
Source: SBA 7(a) + 504 FOIA loan-level data, matched by FranchiseVerdict
A 34.6% charge-off rate means roughly 1 in 3 franchisees failed to repay their SBA loan. Investigate what changed.
What could kill this investment?
SBA loans charge off at 34.6% — 116% above the 16.0% national norm, i.e. higher lender-observed risk.
Source: SBA 7(a) FOIA · FDD Items 3, 21
Risk analysis
FranchiseVerdict rating + FDD Items 3, 4, 8, 16, 21
Risk & Legal
Big Apple Bagels presents moderate-to-caution risk due to declining unit growth, absent net income disclosure, unprotected territories, and high capital requirements relative to an unproven ROI model.
Litigation (Item 3)
Subject: officers or affiliates. The franchisor is not a named party in these cases.
0 case reference(s): 0 pending, 0 settled.
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · Sassetti LLC
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Audited financial statements of BAB Systems, Inc. (a wholly owned subsidiary of BAB, Inc.). FY ended Nov 30, 2025. Total Revenues $3,270,721 comprised of royalty fees $1,984,438, marketing fund revenue $1,142,281, and franchise fees and other $144,002. franchisor_revenue_yr1/yr2 reflect royalty fees for 2025/2024; other_revenue reflects marketing fund revenue.
ⓘ These are the parent company's consolidated financials (the parent guarantees the franchisor), not this brand's standalone results — the figure reflects the whole corporate group, not this brand alone.
Supplier relationship · Items 8 & 16
- Franchisor sells you products: Yes
- Kickbacks from required suppliers: Yes
- Must buy proprietary products: Yes
- Restricted to system-approved products: Yes
- Can negotiate own supplier terms: No
Score breakdown · what drove the 40 / 100 verdict
- 01MINORDeclining unit count (-2.0% YoY) signals system contraction and potential franchisee dissatisfaction
- 02MEDNet income not disclosed in FDD Item 19 — impossible to validate profitability claims or ROI
- 03MINORNo protected territory creates direct competition risk; new units could cannibalize existing franchise revenue
- 04MINORHigh initial investment ($512.5K–$745K) with unverified return expectations and no income disclosure
- 05MINOR5% royalty on $632K average revenue = $31.6K annual payment with unknown profit margins
- 06MED48-unit system is small and vulnerable; limited economies of scale and supplier negotiating power
Severity inferred from the FDD text · not a regulatory classification
What are you signing up for?
Ongoing fees run about 8.0% of sales (royalty + ad fund), before rent and labor.
Source: FDD 2026 · Items 11, 12, 17
FDD Items 12, 15, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 10 years |
|---|---|
| Renewal term | 10 years |
| Allowed renewalsℹ | 2 |
| Territory type | No territory protection |
| Protected territory | No |
| Exclusive territoryℹ | No |
| Online sales rightsℹ | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Optional |
| Non-compete (years)ℹ | 2 years |
| Non-compete (miles)ℹ | 10 mi |
| Right of first refusalℹ | Yes |
| Transfer requires consent | Yes |
| Termination notice | 30 days |
| Curable defaultsℹ | 3 |
| Mandatory arbitration | Yes |
| Arbitration location | Chicago, Illinois |
| Jury trial waiver | No |
| Governing law | IL |
| Litigation count | 0 |
View Item 3 litigation summary
0 case reference(s): 0 pending, 0 settled.
Items 10, 11
Training & Operations
- Classroom training
- 30 hrs
- On-the-job training
- 109 hrs
- Training location
- BAB corporate offices, Deerfield, Illinois or via Zoom; operational training at designated franchise store and franchisee's own store
- Ongoing training
- Required
- Time to open
- 6 mo
- From signing to launch
- Site selection
- Franchisee locates; BAB must approve
- Franchisor financing
- Not offered
- Item 10
- POS system
- MicroSale
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: MicroSale
Item 20 · call current owners
Franchisee Contacts
52 owners to call
Name · phone · city · state. Extracted from FDD Item 20
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Big Apple Bagels franchise?
The total investment to open a Big Apple Bagels franchise ranges from $513K – $745K, with an initial franchise fee of $25K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Big Apple Bagels franchise owners earn?
According to Item 19 of the Big Apple Bagels FDD, the average gross sales per unit is $632K. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
Who owns Big Apple Bagels?
Big Apple Bagels is franchised by BAB Systems, Inc.. Its parent company is BAB, Inc.. Source: FDD Item 1, 2026 filing.
What is Item 19 in the Big Apple Bagels FDD?
The FDD section where a franchisor may disclose financial performance of its outlets. Disclosure is optional and formats vary; figures are typically gross sales, which is revenue before expenses, not profit. FranchiseVerdict extracts these figures directly from the Big Apple Bagels FDD and qualifies whose outlets they describe.
What is Big Apple Bagels's franchise failure rate?
Based on SBA 7(a) loan data, Big Apple Bagels has a charge-off rate of 34.6% across 83 loans, meaning 34.6% of franchise loans were charged off. Charge-off rates are one proxy for franchise risk, though they do not capture all closures. This data comes from FOIA-sourced SBA lending records.
How many Big Apple Bagels franchise locations are there?
As of their most recent FDD filing, Big Apple Bagels has 48 total units in the United States, including 48 franchised units and 0 company-owned units.
Is Big Apple Bagels a good franchise to buy?
FranchiseVerdict rates Big Apple Bagels as a C-grade franchise with a verdict score of 40 out of 100 (higher is better). The grade is a deterministic score built from six weighted dimensions — financial health, unit economics, unit growth, scale, legal, and transparency — then calibrated against SBA loan charge-off rates and FDD age. Transparency is one of the six, so a filing that discloses less scores lower on that dimension than one that discloses more. Our rating is based solely on publicly available FDD and government data; we recommend speaking with current franchisees before making any investment decision. This is not investment advice.
Data sourced from public FDD filings and SBA 7(a) FOIA records. Not financial advice.
For franchisors
Are you the franchisor?
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Data extracted from public FDD filings and SBA 7(a) loan disclosures (FOIA). This information is provided for research purposes only and does not constitute financial, legal, or investment advice. Verify all figures with the franchisor's current Franchise Disclosure Document before making any investment decision.