Does the B Bops Application Agreement define 'cause' for termination, and if so, is it curable or non-curable?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Application Agreement | Summary | |-----------------------------------------------|-------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | A. Term of Agreement | Section 3 | The Company will inform you within 90 days from the effective date of the Application Agreement whether development rights or franchise rights will be granted. | | B. Renewal or Extension of | None | Not applicable. | | the Term | | | | C. Requirements for you to | None | Not applicable. | | Renew or Extend | | | 1 To the extent that Minnesota Statutes Section 80C.14 is applicable to the Development Agreement, the Company will comply with Section 80C.14, subdivisions 3, 4 and 5 which require, except in certain specified cases, that you be given ninety (90) days notice of termination (with sixty (60) days to cure) and one hundred eighty days (180) days notice for non-renewal.
2 Pursuant to Minnesota Statutes Section 80C.21 and Minnesota Rule Part 2860.4400J, these provisions shall not in any way abrogate or reduce any of your rights as provided for in Minnesota Statutes, Chapter 80C.
| D. Termination by You | Sections 4 and 8 | You may terminate at anytime without cause. Upon termination you will be entitled to the amount of the deposit ($5,000) minus the lesser of (i) $4,500 or (ii) the actual expenses incurred by the Company, as provided in the Application Agreement. If the Company determines to grant you development rights or franchise rights (whichever is applicable) and you do not execute and deliver the appropriate documentation and pay the initial franchise fee or development fee, whichever is applicable, within 15 days after receipt of the documents the Application Agreement shall become | |----------------------------------------------------|------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | | | null and void. | | E. Termination by the Company without cause | Sections 4 and 7 | The Company has the right to terminate the Application Agreement at any time without cause. The Application Agreement also terminates in the event the Company advises you that the development rights or franchise rights, whichever is applicable, will not be granted. Upon termination you will be entitled to a refund equal to the amount of the deposit ($2,500) minus the lesser of (i) $2,000 or (ii) the actual expenses incurred by the Company, as provided in the Application Agreement. | | F. Termination by the | None | Not Applicable. | | Company with cause | | | | G. "Cause" defined-curable | None | Not Applicable. | | H. "Cause" defined-non-curable | None | Not Applicable | | I. Your obligations Termination/nonrenewal | Section 5 | Upon termination you must return to the Company all confidential information and refrain from any further use of confidential information. | | J. Assignment of contract | None | Not Applicable. | | by the Company | | | | K. "Transfer" by you | Section 10 | You may not transfer or assign the Application Agreement. | | L. The Company's approval of | None | Not Applicable. | | a transfer by you. | | | | M. Conditions for approval | None | Not Applicable. | | of transfer | | |
| N. The Company's right of First Refusal to acquire your business | None | Not Applicable. |
|---|---|---|
| O. The Company's option to | None | Not Applicable. |
| Purchase your business | ||
| P. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 40–49)
What This Means (2025 FDD)
According to B Bops's 2025 Franchise Disclosure Document, the Application Agreement does not define 'cause' for termination, nor does it specify whether such causes are curable or non-curable. The FDD indicates that the company can terminate the Application Agreement at any time without cause. If B Bops terminates the agreement without cause, the franchisee is entitled to a refund equal to the amount of the deposit ($2,500) minus the lesser of (i) $2,000 or (ii) the actual expenses incurred by the Company, as provided in the Application Agreement.
However, the Development Agreement does address termination for cause. The Development Agreement states that B Bops can terminate the agreement if the franchisee defaults in performance or if certain other events occur. The Development Agreement defines 'cause' as both curable and non-curable defaults. Curable defaults allow the franchisee thirty days after written notice to correct the issue, while non-curable defaults, such as unauthorized use of licensed systems or marks, insolvency proceedings, felony convictions, unauthorized transfers, termination of any franchise agreement with B Bops, and willful misrepresentation, do not offer a cure period.
It is important to note that Minnesota law provides certain protections to franchisees. For franchises governed by Minnesota law, B Bops will comply with Minnesota Statutes Section 80C.14, subdivisions 3, 4, and 5, which generally require ninety days' notice of termination with sixty days to cure, and one hundred eighty days' notice for non-renewal. These statutory rights may supersede the termination provisions outlined in the Development Agreement, depending on the specific circumstances and jurisdiction.
Prospective franchisees should carefully review the Application Agreement and Development Agreement, paying close attention to the termination provisions and their rights under applicable state laws. It is advisable to seek legal counsel to fully understand the implications of these provisions and to ensure compliance with all relevant regulations.