Can a Developer establish or operate a B Bops Unit after termination or expiration of the Development Agreement if a Unit Franchise Agreement has not been executed?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
- C. Upon termination or expiration of this Agreement, the development rights granted hereunder shall become null and void and Developer shall immediately cease any further attempts to select or develop sites on which to construct Units. Developer shall have no right to establish or operate any Unit for which a Unit Franchise Agreement has not been executed by Company prior to termination or expiration hereof. Termination or expiration of this Agreement shall not affect the rights of Developer to operate any Unit in accordance with the terms of any Unit Franchise Agreement which Developer has entered into with Company, until and unless such Unit Franchise Agreement is terminated in accordance with its terms. Developer acknowledges that upon termination or expiration hereof, Company shall be entitled to: (i) retain the balance of the development fee not applied towards initial franchise fees prior to termination or expiration hereof; and (ii) establish, or license others to establish, B-Bop's Restaurants in the Trade Area, except to the extent limited by the terms of any Unit Franchise Agreement executed by Company and Developer.
Source: Item 23 — RECEIPTS (FDD pages 53–145)
What This Means (2025 FDD)
According to B Bops's 2025 Franchise Disclosure Document, a Developer's rights to establish or operate a B Bops unit are contingent upon having a Unit Franchise Agreement in effect. Specifically, upon the termination or expiration of the Development Agreement, the developer loses the right to develop new sites. The developer cannot establish or operate any B Bops unit if a Unit Franchise Agreement has not been executed by B Bops before the Development Agreement's termination or expiration.
However, the termination or expiration of the Development Agreement does not impact the Developer's rights to operate existing units, as long as those units are governed by a Unit Franchise Agreement. These existing agreements remain in effect until they are terminated according to their own terms. B Bops retains the right to establish or license others to establish B Bops restaurants in the trade area, except as limited by any existing Unit Franchise Agreements with the Developer.
This provision protects B Bops by preventing a Developer from continuing to expand the franchise after the Development Agreement ends, unless each location is secured by its own Unit Franchise Agreement. For a prospective franchisee, this means that securing a Unit Franchise Agreement for each location is critical to maintaining operational rights, even if the broader Development Agreement concludes.