Does the B Bops company consider the developer's ownership structure when granting development rights?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
Developer acknowledges that the rights and duties created pursuant to this Agreement are personal to Developer and its owners and that Company has granted the development rights in reliance upon the character, skill, business ability, financial capacity and attitude of Developer and its owners.
Therefore, without the prior written approval of Company, neither this Agreement nor the development rights (or any interest therein), nor any controlling ownership interest in Developer may be directly or indirectly, voluntarily or by operation of law, sold, assigned, conveyed, sublet, subfranchised or otherwise transferred (hereinafter collectively referred to as a "transfer") to any person or entity.
Under no circumstances will Developer be permitted to make any partial transfer of the development rights granted hereunder; any sale, assignment or transfer of this Agreement or the development rights shall require Developer to transfer all of Developer's right, title and interest in and to this Agreement and the development rights.
Company shall not unreasonably withhold its consent to any transfer when requested, provided that such transfer complies with the following requirements that may be applicable to the particular type of transfer:
- A.
Transfer to Successor Entity.
If Developer is an individual and desires to transfer the development rights to a partnership, corporation or limited liability company, Company will not unreasonably withhold its consent to such transfer upon satisfaction of the following conditions: (i) such entity shall comply with each of the requirements specified in Section 14 hereof pertaining to ownership of the development rights by an entity; (ii) Developer shall be the owner of a majority of the equity and voting securities or interests issued by such entity; (iii) Developer shall be the principal executive of such entity; (iv) all accrued money obligations of Developer to Company shall be satisfied prior to the transfer and Developer shall otherwise be in full compliance with the terms of this Agreement and all Unit Franchise Agreements between the parties; and (v) the entity agrees, in writing satisfactory to Company, to assume all Developer's obligations hereunder.
Any assignment to an entity as provided herein shall not release Developer from any obligations imposed by this Agreement and Developer shall remain jointly and severally liable for all such obligations.
- B.
Death or Disability of Developer.
In the event of death or permanent mental or physical disability of Developer, or any partner, shareholder or member owning a controlling interest in Developer, the legal representative of Developer, or such partner, shareholder or member thereof, together with all surviving partners, shareholders or members, if any, jointly, shall, within six (6) months of such event apply in writing for the right to transfer the development rights, or the controlling ownership interest of the deceased or disabled partner, shareholder or member in Developer, to such person or persons as the legal representative may specify.
Consent to such transfer (including transfers by devise or inheritance) will not unreasonably be withheld by Company, provided that Company may in its discretion require that such transfer comply with one
Source: Item 23 — RECEIPTS (FDD pages 53–145)
What This Means (2025 FDD)
According to B Bops's 2025 Franchise Disclosure Document, the company does consider the developer's ownership structure when granting development rights. B Bops acknowledges that development rights are personal to the developer and its owners, and the company grants these rights based on the character, skill, business ability, financial capacity, and attitude of the developer and its owners. This indicates that B Bops places significant importance on who the owners are and their capabilities.
Specifically, if the developer is an individual and wants to transfer the development rights to a partnership, corporation, or limited liability company, B Bops will not unreasonably withhold consent if certain conditions are met. These conditions include the entity complying with ownership requirements, the original developer owning a majority of the equity and voting securities, the original developer being the principal executive of the entity, all accrued money obligations being satisfied, and the entity agreeing to assume all of the developer's obligations. This shows that B Bops wants to ensure the original developer maintains control and responsibility even if the structure changes.
In the event of the death or disability of the developer, or any partner, shareholder, or member owning a controlling interest, the legal representative must apply for the right to transfer the development rights or the controlling ownership interest within six months. B Bops will not unreasonably withhold consent to such a transfer, but may require that the transfer comply with certain conditions. This demonstrates that B Bops has a process for handling changes in ownership due to unforeseen circumstances, while still maintaining some control over who becomes a developer.
Overall, these stipulations in the B Bops franchise agreement highlight the importance of the developer's ownership structure and the company's desire to maintain control over who is developing their franchises. Prospective franchisees should carefully consider these requirements and ensure they can meet them before entering into a development agreement with B Bops.