Besides equitable relief, what other remedies are available to B Bops in the event of a franchisee breach?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
ce by Franchisee. If Franchisee fails to perform any covenant or obligation required to be performed by Franchisee under this Agreement, Company shall be entitled, but shall not be required, to perform the same on behalf of and at the expense of Franchisee, upon giving reasonable prior notice to Franchisee of its intention to do so. If Company at any time is compelled to pay, or elects to pay, any sum of money by reason of the failure of Franchisee to comply with any provisions of this Agreement, the amounts so paid by Company shall be due from Franchisee to Company on demand, together with interest at the rate of one and one-half percent (1-1/2%) per month, or the maximum allowed by the law of the state in which the Franchise is located, whichever is less, from the respective date of each such payment until repayment in full.
- C. Costs and Attorney's Fees. If Company or any affiliate thereof is required to institute any legal or arbitration proceeding to collect any amounts owing from Franchisee or to enforce the terms of this Agreement and if Company or such affiliate prevails in such proceeding, Company or such affiliate shall be entitled to reimbursement from Franchisee of its costs and expenses incurred in connection therewith, including attorneys' or accountants' fees, court costs and costs of investigation.
-
- ARBITRATION. Except for controversies, disputes or claims related to or based on the Licensed Marks or any confidential information or trade secrets of Company, all controversies, disputes or claims between Franchisee and Company, its affiliates and their respective directors, officers, shareholders, agents and employees arising out of or related to (i) this Agreement or any other agreement between the parties; (ii) the relationship of the parties hereto; (iii) the validity of this Agreement or any other agreement between the parties; or (iv) any operating policy or procedure of the Licensed System shall, on demand of either party, be submitted to arbitration in accordance with the current commercial arbitration rules of the American Arbitration Association. Any arbitration proceeding shall be conducted in Des Moines, Iowa and shall be heard by one arbitrator, the identity of whom shall be agreed upon in advance by the parties. In the event the parties are unable to agree upon a single arbitrator, each party shall select one arbitrator and the two arbitrators so selected shall in turn select a third arbitrator and the arbitration proceeding shall be heard before the three-person panel.
The arbitrator(s) shall have the right to award or include in the award any relief deemed appropriate under the circumstances, including, without limitation, money damages (with interest on unpaid amounts from the due date), specific performance, injunctive relief and attorneys fees and
costs in accordance with Section 26(C) of this Agreement, provided that the arbitrator(s) shall not award exemplary or punitive damages. The award and decision of the arbitrator(s) shall be conclusive and binding upon all parties hereto and judgment upon the award may be entered in any court of competent jurisdiction. Each party waives any right to contest the validity and enforceability of such award. The parties agree to be bound by the provisions of any limitation on the period of time by which claims must be brought under applicable law or this Agreement.
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2025 FDD)
According to B Bops's 2025 Franchise Disclosure Document, in addition to equitable relief, B Bops has several other remedies available if a franchisee fails to meet their obligations. B Bops can perform the franchisee's obligations on their behalf, at the franchisee's expense, after providing reasonable notice. Any sums B Bops pays due to a franchisee's failure to comply with the agreement are due from the franchisee on demand, along with interest. This interest is calculated at 1.5% per month, or the maximum rate allowed by the state where the franchise is located, whichever is less.
If B Bops has to start legal or arbitration proceedings to collect what the franchisee owes or to enforce the franchise terms, and B Bops wins, the franchisee must reimburse B Bops for all costs and expenses. These costs include attorney's and accountant's fees, court costs, and investigation costs. If a franchisee doesn't make required modifications to the franchise premises, B Bops can enter the premises and make those changes at the franchisee's expense. The franchisee must then reimburse B Bops for these expenses.
Upon termination of the franchise agreement, the franchisee must return all confidential information, such as the Operations Manual, to B Bops and stop using that information. The franchisee must also use the franchise premises in line with the non-compete agreement and transfer all telephone numbers and listings associated with the franchise to B Bops. Termination of the agreement does not relieve the franchisee of any obligations, and B Bops retains all rights and remedies for any claims against the franchisee. These obligations that survive termination remain in effect even after the agreement ends.
These remedies provide B Bops with various avenues to address franchisee breaches, from performing obligations on the franchisee's behalf and recovering associated costs to pursuing legal action and ensuring compliance with post-termination obligations. Prospective franchisees should carefully consider these potential remedies and their financial implications.