Bab, Inc.
BAB, Inc. is a franchisor and licensor of specialty bakery-cafe concepts built around bagels, muffins, coffee, and related add-on products. Its core brands are Big Apple Bagels and My Favorite Muffin, supported by Brewster’s coffee and SweetDuet frozen yogurt as an optional brand extension. The company does not currently operate company-owned stores; instead, it earns most of its revenue from royalties, initial franchise fees, and sales of licensed products to franchisees and approved customers. As of November 30, 2025, BAB had 60 franchise units and 3 licensed units in operation across 18 states, with 4 additional units under development.
Fiscal year 2025 · change from previous year
Development 2020–2025
Business
Share of revenueOngoing royalty fees collected from franchised units based on retail and wholesale sales.
Upfront fees paid by franchisees when new stores are awarded or transferred.
Sales of branded products such as muffin mix, coffee, cream cheese, and frozen bagels to franchisees and approved customers.
Pass-through marketing fund revenue recognized as related marketing expenses are incurred.
Products
Reported · share of revenue- Royalty57.7 %
- Marketing Fund33.2 %
- Licensing Fees and Other Income8.4 %
- Franchise0.7 %
Source: 10-K FY2025, revenue the company reports per product line (SEC XBRL). Shares are of the lines shown and add up to 100 %.
Customers
BAB’s direct customers are primarily its franchisees and licensees, not end consumers. Franchisees buy the right to operate Big Apple Bagels or My Favorite Muffin locations and rely on the company for brand standards, training, recipes, marketing support, and purchasing leverage. Licensed operators and approved customers buy branded inputs such as muffin mix and Brewster’s coffee to support store operations and product consistency. The ultimate consumer demand comes from bakery-cafe guests seeking bagels, muffins, coffee, sandwiches, and related convenience food offerings, but the company’s revenue is tied to the performance of the franchise system rather than retail sales at company-owned stores.
Operators of Big Apple Bagels and My Favorite Muffin stores who pay royalties and fees in exchange for brand rights, operating systems, and support.
Operators of licensed units that use BAB-branded products and concepts, generating product and licensing revenue.
Third-party buyers of branded products such as Brewster’s coffee and muffin mix for use in foodservice operations.
Potential new franchisees attracted by a relatively small-format bakery-cafe concept and the company’s established brand names.
Strategy
BAB’s strategy centers on supporting and expanding a small franchise system built around two complementary bakery-cafe brands. The company is leveraging cross-brand synergies by placing muffin products in BAB units and bagel products and Brewster’s coffee in MFM units, which should improve product breadth without requiring a company-owned store base. It also aims to keep franchisee servicing efficient by supporting a combined base of BAB and MFM operators. The company has not pursued acquisitions to date, and its current focus appears to be steady system maintenance, selective unit development, and preserving brand quality and franchise economics.
New units are the main path to long-term royalty growth in a capital-light model.
Selling muffins in BAB units and bagels/Brewster’s coffee in MFM units improves system economics and product relevance.
Royalty revenue depends on franchisee store performance and the reputation of the brands.
Geography
BAB’s business is concentrated in the United States, with franchise and licensed units operating in 18 states as of November 30, 2025. The company notes that Big Apple Bagels units are primarily concentrated in the Midwest and Western United States, which indicates that its brand footprint is regionally clustered rather than nationally uniform. Because the company has no company-owned store base, its geographic exposure is driven by the location of franchisees and the local economics of those markets. This makes the business sensitive to regional consumer demand, traffic patterns, labor availability, and local competition in the states where its units operate.
Risks
BAB is exposed to the typical risks of a small foodservice franchise system, including shifts in consumer tastes, local economic weakness, traffic patterns, and competition from other bakery-cafe concepts. Because the company relies on franchise royalties and product sales rather than company-owned store revenue, weak franchisee sales or store closures can quickly reduce cash generation. Food safety, illness, or quality issues at a limited number of stores could damage the brand and franchise demand even though the company has limited direct operating control. The business is also sensitive to ingredient inflation, labor shortages, weather disruptions, and supply interruptions, while its small scale increases dependence on a limited number of franchisees, suppliers, and brand relationships.
Most revenue comes from royalties and franchise-related fees, so weaker store sales or closures directly reduce company revenue.
Exposure: Royalty fee revenue and franchise fee revenue
A problem at one or a few stores can hurt the entire brand and reduce future franchise demand.
Exposure: Franchise network and consumer perception
Higher food and labor costs can weaken franchisee profitability and reduce royalty-bearing sales.
Exposure: Franchisee unit economics
The company depends on third-party suppliers for branded inputs such as coffee, mix, and bakery products.
Exposure: Licensed product sales and franchise operations
Accounting
Judgemental itemsRevenue is based on franchisee-reported sales and estimates when reports are not yet received, which affects timing and quarter-end comparability.
Impact: Can shift revenue between periods without changing underlying system sales
Marketing fund revenue is recognized when related expenses are incurred, so gross revenue can fluctuate while net income is largely unchanged.
Impact: Creates volatility in reported revenue
The company tests goodwill and indefinite-lived intangibles for impairment based on qualitative and, if needed, quantitative assessments.
Impact: Potential non-cash write-downs if brand value or future cash flows weaken
Realizability depends on projected future taxable income and tax planning strategies.
Impact: May require valuation allowance changes
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Last updated: 11/08/2026