Can B Bops establish a company-owned B Bops Restaurant outside of a franchisee's exclusive territory?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
You will be granted an exclusive territory under the Franchise Agreement consisting of the area encompassed within a two (2) mile radius of the Franchise premises. During the term of the Franchise Agreement, the Company and its affiliates are prohibited from opening or franchising a B-Bop's Restaurant or other business serving similar products at any location within your exclusive territory. The Company and its affiliates are entitled under the Franchise Agreement to establish a company-owned B-Bop's Restaurant or grant a Franchise to any third party at any location other than as described above. The continuation of your exclusive territory is not dependent upon achieving a particular sales volume, market penetration or other similar contingency. There are no circumstances under which the Company is entitled to modify your exclusive territory without your consent.
The Franchise is granted for a specific location that must be approved by the Company. Any relocation of the Franchise requires the prior written approval of the Company and is permitted only when use of the original location is no longer possible due to damage or destruction, taking by eminent domain or lapse of the lease (in the absence of a default thereunder).
The Franchise granted by the Company under the single-unit arrangement does not entitle the Franchisee to open additional locations.
Neither the Company nor any of its affiliates currently operate or franchise the operation of a fast food business under a different trademark, and neither the Company nor any of its affiliates have any presently formulated plans to engage in such activity in the future.
There are no restrictions on the customers that may be served by your Franchise and you may solicit or accept orders from customers outside of your exclusive territory and you have the right to use other channels of distribution, such as the Internet or other methods of direct marketing to make sales outside of your exclusive territory. Similarly, there are no restrictions on the Company or its affiliates on the customers that may be served by any B-Bop's Restaurant that either of them may establish (consistent with the exclusive territorial rights granted to you under the Franchise Agreement), including customers that may reside in the exclusive territory granted to you. The Company and its affiliates have never used, but do reserve the right to use, other channels of distribution, including other methods of direct marketing to make sales to customers under the "B-Bop's" trademark, including customers residing within your exclusive territory. The Company and its affiliates have not used, but do reserve the right to use, other channels of distribution, including other methods of direct marketing, to make sales to customers under trademarks different from the "B-Bop's" trademark, including customers residing within your exclusive territory; provided, however, as noted above neither the Company nor any of the affiliates have any presently formulated plans to operate or franchise the operation of a fast food business under a different trademark. There is no requirement under the Franchise Agreement or otherwise that the Company or any of its affiliates must pay you any compensation for soliciting or accepting orders from customers residing within your exclusive territory.
MULTIPLE-UNIT ARRANGEMENT
Under the Development Agreement, you will be granted the exclusive right to establish Franchises in a defined trade area at sites to be approved by the Company. The exact size and boundaries of the trade area will be negotiated between the parties prior to execution of the Development Agreement, with the agreed upon definition of such trade area to be attached as an appendix thereto.
Source: Item 12 — TERRITORY (FDD pages 33–35)
What This Means (2025 FDD)
According to B Bops's 2025 Franchise Disclosure Document, the company's ability to establish a company-owned B Bops Restaurant outside a franchisee's exclusive territory depends on whether the franchisee has a single-unit or multiple-unit arrangement. For single-unit franchisees, B Bops and its affiliates are prohibited from opening or franchising a B Bops Restaurant or similar business within a two-mile radius of the franchisee's premises during the franchise agreement term. However, B Bops is entitled to establish a company-owned restaurant or grant a franchise to a third party outside this exclusive territory.
For multiple-unit franchisees operating under a Development Agreement, B Bops grants exclusive rights to establish franchises within a defined trade area. As long as the franchisee adheres to the development schedule and the Development Agreement remains in effect, B Bops and its affiliates cannot establish company-owned restaurants or grant franchises to third parties within that trade area. However, upon termination of the Development Agreement, B Bops can develop the trade area itself or grant those rights to others, except for the exclusive territory granted for individual franchises already established.
In both single and multiple-unit arrangements, the continuation of the franchisee's exclusive territory is not dependent on achieving specific sales volumes or market penetration. However, for multiple-unit franchisees, maintaining exclusive rights in the trade area depends on compliance with the development schedule outlined in the Development Agreement. B Bops also retains the right to use other channels of distribution, including direct marketing, to make sales to customers, even those residing within a franchisee's exclusive territory, without any obligation to compensate the franchisee.