Does the definition of 'transfer' by you in the B Bops Development Agreement include a merger involving an entity owning the development rights?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
| M. Conditions for the Company approval of transfer | Section 13 | Proposed transferee must satisfy the Company's current standards for new developers; assumption of Development Agreement; execution of general release (to the extent permitted by Minnesota law) and nondisclosure and noncompetition agreement; payment of $3,000 transfer fee; compliance with transfer provisions of Franchise Agreement if any Franchises simultaneously being transferred; and compliance with right of first refusal granted to the Company. |
|---|---|---|
| N. The Company's right of first refusal to acquire your development rights | Section 13(D) | The Company has the right to purchase the development rights or any ownership interest in the entity owning the development rights upon the same terms and conditions as contained in any bona fide offer received from a third party. |
| O. The Company's option to | None | Not applicable. |
| purchase your development | ||
| rights | ||
| P. Your death or disability | Section 13(B) | The development rights, or any controlling interest in any entity owning the development rights, must be transferred to an approved transferee, with the Company to be notified of the proposed transferee within six (6) months of death or disability. |
| Q. Non-competition covenants | Section 12 | No involvement in a business substantially |
| during the term of the | similar to a B-Bop's Restaurant at any | |
| Development Agreement | location. | |
| R. Non-competition covenants after the development rights are terminated or expire | Section 12 | No involvement in a business substantially similar to a B-Bop's Restaurant for two (2) years after termination or expiration within: (i) the trade area specified in the Development Agreement; |
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 company's right of first refusal extends to the purchase of development rights or any ownership interest in the entity that owns those rights. This means that if a franchisee receives a legitimate offer from a third party to purchase their development rights or the entity that holds those rights (which could include a merger), B Bops has the first opportunity to match that offer and acquire the rights themselves.
Additionally, the FDD states that in the event of death or disability, the development rights, or any controlling interest in an entity owning the development rights, must be transferred to an approved transferee. The company must be notified of the proposed transferee within six months of the event.
These clauses in the B Bops Development Agreement ensure that B Bops retains control over who can develop B Bops restaurants in a given territory, even if the ownership structure of the development entity changes through a sale of the entity or a merger. This protects B Bops's strategic interests and ensures that any new developer meets their standards. The franchisee must comply with the transfer provisions of the Franchise Agreement if any Franchises are simultaneously being transferred and comply with the right of first refusal granted to the Company.