In the context of a transfer, what does B Bops require the franchisee (and potentially others) to execute?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
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- (3) The transferee, including such partners or shareholders thereof as Company may direct, shall jointly and severally execute one of the following (as Company may direct):
- (a) a written assignment and assumption agreement, in a form satisfactory to Company, whereby the transferee assumes all of Franchisee's obligations under this Agreement; or
- (b) the standard form of franchise agreement then being used by Company to grant new franchises; provided, however, that the term of such agreement shall be for the unexpired portion of the Term of this Agreement and that no greater payments than those required by Sections 9(B) and 9(C) of this Agreement shall be required.
- (4) Franchisee (and such partners, shareholders or members thereof as Company may direct), or the individual partner, shareholder or members thereof proposing to make such transfer, shall execute a general release of all claims against Company and its affiliates and their respective directors, officers, agents and employees;
- (5) Franchisee (and such partners, shareholders or members thereof as Company may direct), or the individual partner, shareholder or member proposing to make the transfer, shall execute a nondisclosure and noncompetition agreement in favor of Company containing the restrictions set forth in Sections 16 and 17 of this Agreement;
- (6) Franchisee shall be in full compliance with the terms of this Agreement, shall have fully paid and satisfied all of Franchisee's obligations owing to Company under this Agreement and any other agreement relating to the Franchise, and shall have fully paid a transfer fee of Three Thousand Dollars ($3,000) to Company for supervisory, administrative, accounting, legal and other expenses incurred by Company in connection with such transfer;
- (7) If transferee is a partnership, corporation or limited liability company, such entity shall have complied with each of the requirements specified in Section 20 hereof pertaining to ownership of the Franchise by an entity;
- (8) Franchisee, or the partner, shareholder or member proposing to make such transfer, shall have complied with the right of first refusal provisions set forth in Section 19(D) hereof.
- (9) Company shall have approved the material terms of the transfer and determined that the price and terms of payment are not so burdensome as to have a material adverse affect on the future operation of the Franchise by the transferee.
- (10) Franchisee shall have entered into an agreement with Company agreeing that all obligations of the transferee to Franchisee shall be subordinate to the obligations of transferee to make payments to Company as required under the terms
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2025 FDD)
According to B Bops's 2025 Franchise Disclosure Document, in the event of a franchise transfer, several documents must be executed by the franchisee and potentially other parties like partners or shareholders, as directed by B Bops. These requirements ensure that the new franchisee is bound by the same obligations and standards as the original franchisee.
Specifically, the transferee must execute either a written assignment and assumption agreement, which transfers all of the original franchisee's obligations to the new franchisee, or the standard form of the franchise agreement then in use by B Bops. If the standard form is used, the term will only be for the unexpired portion of the original agreement, and the payments required will be limited to those outlined in Sections 9(B) and 9(C) of the agreement. Additionally, the franchisee (and any relevant partners, shareholders, or members) must execute a general release of all claims against B Bops and its affiliates, as well as a nondisclosure and noncompetition agreement that aligns with Sections 16 and 17 of the franchise agreement.
Furthermore, the franchisee must be in full compliance with the existing franchise agreement, including having paid all outstanding obligations to B Bops. A transfer fee of $3,000 is also required to cover B Bops's expenses related to the transfer, such as supervisory, administrative, accounting, and legal costs. If the transferee is a partnership, corporation, or limited liability company, they must meet the ownership requirements outlined in Section 20 of the agreement. Finally, the franchisee must comply with the right of first refusal provisions detailed in Section 19(D) of the agreement, ensuring B Bops has the opportunity to purchase the franchise before it is transferred to a third party. These measures protect B Bops's interests and ensure a smooth transition of ownership while maintaining the integrity of the franchise system.