What is the Developer required to do immediately upon termination or expiration of the B Bops agreement regarding site selection?
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' 2025 Franchise Disclosure Document, upon termination or expiration of the Development Agreement, the developer must immediately cease any further attempts to select or develop sites for B Bops restaurants. The developer loses all rights to establish or operate any B Bops unit for which a Unit Franchise Agreement has not been executed by B Bops prior to the termination or expiration of the Development Agreement. However, the termination or expiration of the Development Agreement does not affect the developer's rights to operate any B Bops unit under a Unit Franchise Agreement already in place, unless that Unit Franchise Agreement is separately terminated according to its own terms.
B Bops retains the right to keep the balance of the development fee that has not been applied to initial franchise fees before the termination or expiration. B Bops also has the right to establish, or license others to establish, B Bops restaurants in the Trade Area, except as limited by the terms of any Unit Franchise Agreement executed by B Bops and the developer.
This means that a B Bops developer needs to be aware that their development rights cease immediately upon termination or expiration of the Development Agreement. They cannot continue to scout or secure new locations unless they already have a Unit Franchise Agreement in place for those locations. This could have significant financial implications if the developer has invested time and resources into site selection without securing the necessary franchise agreements.