What is the dependency between ownership changes and transfer restrictions for B Bops developers?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
ts in Franchisee. Any change in ownership interests which, when taken alone or together with all previous or simultaneous changes in ownership during the Term hereof, constitutes a change of fifty percent (50%) or more of the ownership interests in Franchisee shall be considered a transfer subject to the provisions of Section 19(C) and 19(D) hereof.
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- ENTITY FRANCHISEE. In the event Franchisee is a partnership (general or limited), corporation or limited liability company on the effective date of this Agreement, or if the Franchise or any ownership interest in Franchisee is thereafter transferred to a partnership,
corporation or limited liability company in accordance with the provisions of Section 19(A) hereof, such entity shall comply with the following:
- (1) The entity shall be newly organized and its activities shall be confined exclusively to the development and operation of B-Bop's Restaurants pursuant to the terms of this Agreement or other franchise agreements with Company;
- (2) The governing documents of such entity shall provide that the issuance or transfer of any ownership interests in such entity shall be subject to the restrictions contained in this Agreement;
- (3) Any stock certificate or other evidence of ownership issued by such entity, shall have conspicuously endorsed upon it a statement that it is held subject to, and that further assignment or transfer thereof is subject to, all restrictions imposed upon transfer by this Agreement;
- (4) Any person who is or becomes the holder of a controlling interest in such entity or who has any responsibility for management of Franchisee, shall at the direction of Company execute a guaranty agreeing to be personally bound by the provisions of this Agreement; and
- (5) At the request of Company, such entity shall furnish to Company a certified copy of its governing documents and/or a list of all owners indicating their respective ownership interests in the entity.
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- ASSIGNMENT BY COMPANY. Company shall have the right to assign this Agreement to any person or entity without the consent of Franchisee, provided that the transferee agrees in writing to assume all Company's obligations imposed by this Agreement.
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- TERMINATION BY FRANCHISEE.
Source: Item 23 — RECEIPTS (FDD pages 53–145)
What This Means (2025 FDD)
According to B Bops's 2025 Franchise Disclosure Document, any change in ownership interests that totals 50% or more is considered a transfer and is subject to specific transfer provisions. If the B Bops developer is a corporation, partnership, or limited liability company, the governing documents must state that any issuance or transfer of ownership interests is subject to the restrictions outlined in the agreement. Additionally, any stock certificate or ownership evidence must have a statement indicating it is subject to transfer restrictions.
Furthermore, individuals holding a controlling interest or having management responsibilities within the developer entity may be required by B Bops to execute a guaranty, binding them personally to the agreement's provisions. B Bops may also request a certified copy of the entity's governing documents or a list of all owners with their respective ownership interests.
B Bops also requires notification of any ownership change of 10% or more. This ensures B Bops maintains control over who is involved in the development and operation of B Bops franchises and that all parties adhere to the established standards and obligations. This also gives B Bops the opportunity to exercise their right of first refusal if the developer decides to sell, allowing B Bops to purchase the development rights or ownership interest under the same terms as a bona fide offer.