After the B Bops development rights are terminated or expire, what geographic area is covered by the non-competition covenants?
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; or (ii) 20 miles of any other B-Bop's Restaurant then in operation or under development, except that you will be entitled to continue to operate any B-Bop's Restaurant pursuant to a Franchise Agreement entered into with the Company prior to termination or expiration of the development rights. |
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, if the development rights are terminated or expire, the non-competition covenants apply for two years. During this period, the developer cannot be involved in a business substantially similar to a B Bops Restaurant.
The geographic scope of this restriction includes (i) the trade area specified in the Development Agreement, or (ii) 20 miles of any other B Bops Restaurant then in operation or under development. However, this restriction does not prevent the developer from continuing to operate a B Bops Restaurant if they have a Franchise Agreement entered into with B Bops before the termination or expiration of the development rights.
This means that a former B Bops developer is restricted from opening or being involved with a competing restaurant within their previously agreed-upon trade area or within 20 miles of an existing or planned B Bops location for a period of two years. The trade area is defined in the Development Agreement, which a prospective franchisee should carefully review to understand the extent of the restriction. This non-compete agreement aims to protect B Bops's market share and brand recognition.