Following termination, what geographic area restricts a B Bops developer from operating a similar business?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
e parties hereto.
- 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.
- C. For purposes of this Section 12, a business shall be deemed the "same as or substantially similar to a B-Bop's Restaurant" if the business is engaged in preparing and serving to the public any food items included from time to time as a standard menu item for a B-Bop's Restaurant.
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- ASSIGNMENT BY DEVELOPER.
Source: Item 23 — RECEIPTS (FDD pages 53–145)
What This Means (2025 FDD)
According to the 2025 B Bops Franchise Disclosure Document, a developer is restricted from engaging in a similar business for two years after the termination or expiration of the Development Agreement. This restriction applies to any location within the Trade Area or within a 20-mile radius of any operating or under-construction B Bops Restaurant. This includes restaurants owned by the company, its affiliates, or other franchisees. However, the developer can continue to operate any B Bops unit under a Unit Franchise Agreement that was already in place before the termination or expiration of the Development Agreement.
This non-compete clause prevents a former B Bops developer from leveraging their knowledge and experience gained during the development agreement to directly compete with existing B Bops restaurants. The geographic scope ensures that nearby B Bops locations are protected from potential competition from a similar business operated by the former developer. The definition of 'substantially similar' is clearly defined as any business serving standard B Bops menu items, leaving little room for interpretation.
For a prospective B Bops developer, this clause highlights the importance of understanding the terms of both the Development Agreement and any subsequent Unit Franchise Agreements. While the Development Agreement may be terminated, existing Unit Franchise Agreements remain in effect unless terminated separately. This provides some security for the developer, allowing them to continue operating existing units even if the overall development agreement ends. However, it also means they cannot open a competing restaurant nearby for two years after the agreement ends.
It is important for potential developers to carefully consider the implications of this non-compete clause, especially if they envision operating other restaurant concepts in the future. They should also seek legal counsel to fully understand the scope and enforceability of the clause in their specific jurisdiction. Understanding these restrictions is crucial for making an informed decision about investing in a B Bops development agreement.