Will a B Bops franchisee always receive an exclusive territory?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
The extent of the territorial rights granted by the Company varies depending upon whether you are purchasing one Franchise pursuant to the single-unit arrangement or purchasing the right to develop a number of Franchises pursuant to the multiple-unit arrangement.
SINGLE-UNIT ARRANGEMENT
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.
Source: Item 12 — TERRITORY (FDD pages 33–35)
What This Means (2025 FDD)
According to B Bops's 2025 Franchise Disclosure Document, the grant of an exclusive territory depends on whether the franchisee is purchasing a single-unit or multiple-unit franchise. For a single-unit franchise, B Bops grants an exclusive territory consisting of the area within a two-mile radius of the franchise premises. During the term of the Franchise Agreement, B Bops is prohibited from opening or franchising a B Bops restaurant or similar business within this territory. The continuation of the exclusive territory is not dependent on performance metrics like sales volume or market penetration, and B Bops cannot modify the territory without the franchisee's consent.
For multiple-unit franchisees operating under a Development Agreement, B Bops grants an exclusive right to establish franchises within a defined trade area. The size and boundaries of this trade area are negotiated and defined in an appendix to the Development Agreement. As long as the franchisee adheres to the development schedule outlined in the agreement, B Bops is prohibited from establishing company-owned restaurants or granting franchises to third parties within the trade area. However, upon termination of the Development Agreement, the exclusive development rights are rescinded, and B Bops is free to develop the area or grant development rights to others, except for the exclusive territory granted for individual franchises already established.
In both single-unit and multiple-unit arrangements, the exclusive territory provides a degree of protection for the franchisee's investment. However, it's important to note that these territorial rights are subject to specific conditions and limitations, such as compliance with the development schedule in the case of multiple-unit agreements. Additionally, B Bops retains the right to use other channels of distribution, including direct marketing, to make sales to customers within the franchisee's exclusive territory, although they have no current plans to operate a fast food business under a different trademark. Prospective franchisees should carefully review the terms of the Franchise Agreement and Development Agreement to fully understand the scope and limitations of their territorial rights.