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FDD Talk: The Big Apple Bagels/My Favorite Muffin Franchise Opportunity (Financial Performance Analysis, Estimated Costs, and Other Important Stuff You Need to Know)

by Franchise Chatter on January 4, 2017

in Bagel Franchise, Bakery Franchise, FDD Talk 2017: Food Franchises, Franchise Earnings



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In this FDD Talk 2016 post, you’ll learn the following:

  • Section I – Background information on the Big Apple Bagels/My Favorite Muffin franchise opportunity, including relevant news updates
  • Section II – Estimated initial investment for a Big Apple Bagels/My Favorite Muffin franchise, based on Item 7 of the company’s 2016 FDD
  • Section III – Presentation and analysis of Big Apple Bagels/My Favorite Muffin’s financial performance representations, based on Item 19 of the company’s 2016 FDD, including information on the:
  • 2015 average gross revenues for the 1st quartile, 2nd quartile, 3rd quartile, and 4th quartile of Big Apple Bagels Stores located in the United States that were operated for the entire 2015 fiscal year
  • 2015 average gross revenues for the 1st quartile, 2nd quartile, 3rd quartile, and 4th quartile of My Favorite Muffin Stores located in the United States that were operated for the entire 2015 fiscal year

Section I – Background Information

Back in 1992, Michael Evans thought it was time for delicious bagels to make their mark on a larger scale outside of New York. He opened the first Big Apple Bagels in 1993 in Deerfield, Illinois, and began franchising that same year. It’s a fast-casual restaurant chain with the tag line of Something Big is Always Baking. Besides a robust bagel menu, the restaurant also features muffins, omelets, coffee, sandwiches, salads, and soups.

Meanwhile, back in 1987 is when the My Favorite Muffin concept got its start. BAB systems, the franchising company behind Big Apple Bagels, acquired My Favorite Muffin back in 1996. The chain carries the tagline of Perfectly Delicious. Uniquely Delightful., and the muffins can also be found in Big Apple Bagels locations.

That same year, BAB also acquired the Brewster’s Coffee brand, which can be found in both chains.

Back in 2006, there were 144 locations, but the chain has seen slow but steady decline ever since, and now has just 83 locations, one of which is located in Dubai, which opened in November 2015.

Here’s how Big Apple Bagels/My Favorite Muffin keeps things fresh in the fast-casual bakery-café segment:

Muffins, Muffins Everywhere

The cake-like muffins are made from a proprietary batter formula that allows for a huge variety of jumbo and mini muffins. Here’s just a sampling:  Banana Nut, Blueberry, Blueberry Cheesecake, Boston Cream Pie, Cherry Cheesecake, Chocolate Cheesecake, Chocolate Chip, Cinnamon Crumb Cake, Cinnamon Swirl Cheesecake, Deep Dish Apple Pie, Double Chocolate, Golden Corn Bread, Lemon Poppyseed, Pumpkin Spice.

And they use soybean oil instead of butter for a better taste and less cholesterol.

An Endangered Species:  Fresh Bagels

Big Apple Bagels makes its staple offering from scratch at each location with a proprietary recipe. That’s becoming a rarity in the bagel market these days. Sure, you can buy bagels at a grocery store’s bread aisle, but you can bet they won’t taste as good as fresh-made bagels, and they’ll be more expensive to boot.

And grocery stores aren’t exactly known for their customer service focus. Big Apple Bagels is.

International Expansion

Big Apple Bagels has had the odd location here and there internationally over the years, but the opening of its first location in Dubai represents what it hopes will be the beginning of real expansion. Its Master Franchise Agreement with Mont Royal General Trading LLC has the ultimate goal of opening 30 locations throughout the Middle East over the next ten years.

A Struggling Company?

The decline in locations over the last decade can only be taken as a cause for concern. The stock price for BAB Systems has never been anything to get excited about. Its most recent peak was all the way back in 2005, at a less-than-impressive $1.35 – nowadays it’s only 80 cents.

It’s also always disturbing when a chain or franchise company doesn’t maintain a press release or media area on its website, and it never seems to mention how many locations there are.

Section II – Estimated Costs

  • The total estimated initial investment necessary to begin operation of a Big Apple Bagels/My Favorite Muffin production store ranges from $294,700 to $398,100.

Section III – Financial Performance Representations (Item 19, 2016 FDD) and Analysis



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