Is a B Bops developer allowed to continue operating a B Bops Unit after termination of the Development Agreement, according to the non-compete?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
- B. Developer hereby agrees that for a period of two (2) years immediately following the termination or expiration of this Agreement, Developer, its directors, officers, shareholders, partners, members, principals or agents will not, directly or indirectly, enter into or engage in any business the same as or substantially similar to a B-Bop's Restaurant operating at any location within the Trade Area or within a twenty (20) mile radius of any other B-Bop's Restaurant then in operation or under construction, whether owned and operated by Company, any affiliate of Company or by a franchisee under license granted by Company, except that Developer shall be entitled to continue to own and operate any Unit pursuant to a Unit Franchise Agreement entered into between the parties hereto.
Source: Item 23 — RECEIPTS (FDD pages 53–145)
What This Means (2025 FDD)
According to B Bops's 2025 Franchise Disclosure Document, a developer is generally permitted to continue operating a B Bops unit after the termination or expiration of the Development Agreement, provided that the unit is operated under a Unit Franchise Agreement entered into with B Bops. This allowance is an exception to the non-compete clause that would otherwise prevent the developer from engaging in a similar business.
Specifically, the non-compete agreement states that for two years following the termination or expiration of the Development Agreement, the developer cannot engage in a business substantially similar to a B Bops restaurant within the Trade Area or within a 20-mile radius of any B Bops restaurant. However, this restriction does not prevent the developer from continuing to own and operate a B Bops unit if a Unit Franchise Agreement is in place.
This provision protects the developer's investment in existing B Bops units while ensuring that they do not directly compete with B Bops in new ventures after the Development Agreement ends. It also clarifies that the termination of the Development Agreement does not automatically terminate the Unit Franchise Agreement, which remains in effect according to its own terms. This is a fairly standard practice in multi-unit franchise agreements, allowing franchisees to maintain their existing businesses even if the development agreement concludes.