What constitutes a default related to the termination of a B Bops Unit Franchise Agreement?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
11. DEFAULT AND TERMINATION.
- A. The occurrence of any of the following events shall constitute a default under this Agreement:
- (1) Developer uses the Licensed System or the Licensed Marks at any location except pursuant to, and in accordance with, a valid and effective Unit Franchise Agreement between the parties covering such location;
- (2) Developer (or any partner, shareholder or member if Developer is a partnership, corporation or limited liability company) is convicted of or pleads guilty to any felony or to any crime relating to operation of any Unit;
- (3) Any assignment made for the benefit of Developer's creditors, any appointment of a receiver, trustee or similar officer for Developer or its assets, the commencement of bankruptcy or other insolvency proceedings by or against Developer, or if Developer is a partnership, corporation or limited liability company, any of the foregoing occur with respect to any partner, shareholder or member of Developer who owns a controlling interest in Developer or who has any responsibility for management of Developer;
- (4) Any purported assignment or transfer of this Agreement, the development rights granted hereunder or an ownership interest in Developer other than in accordance with the provisions of Section 13 hereof;
- (5) Termination of any Unit Franchise Agreement between the parties in accordance with the terms thereof, or by Developer without cause;
- (6) Developer makes, or has made, any willful or fraudulent misrepresentation to Company in connection with obtaining this Agreement, any Unit Franchise Agreement or any site approval hereunder; or
- (7) Developer defaults in the performance of any term, covenant or condition of this Agreement which is not expressly referenced in this Section 11.
Source: Item 23 — RECEIPTS (FDD pages 53–145)
What This Means (2025 FDD)
According to B Bops' 2025 Franchise Disclosure Document, several events can trigger a default under the Development Agreement. These include using the Licensed System or Licensed Marks at unauthorized locations, a felony conviction of the developer (or a partner/shareholder with controlling interest), or making a fraudulent misrepresentation to B Bops to obtain the agreement.
Other default triggers involve financial instability such as assignments for the benefit of creditors or bankruptcy proceedings involving the developer or its controlling stakeholders. Unauthorized transfers of the agreement, development rights, or ownership interests also constitute a default. Termination of any Unit Franchise Agreement, especially if done by the developer without a valid reason, is another cause for default.
Finally, B Bops considers a failure to perform any term, covenant, or condition of the Development Agreement not specifically mentioned in Section 11 as a default, provided it is not cured within thirty days of written notice. These stipulations are designed to protect B Bops' brand and operational standards, ensuring developers adhere to the agreed-upon terms and maintain financial and legal integrity.