What are the B Bops franchisor's rights upon the occurrence of a default event?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
- B. Upon occurrence of any of the events set forth above, Company may, without prejudice to any other rights or remedies contained in this Agreement or provided by law or equity, terminate this Agreement by notice to Developer. Such termination shall be effective immediately upon receipt of written notice by Developer if the default is an event specified in paragraphs (1) through (6) above, to which no right of cure exists. Termination shall be effective thirty (30) days after receipt of written notice by Developer if the default is an event specified in paragraph (7) above and such default is not cured to Company's satisfaction within such period.
- 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, the company has specific rights if a developer defaults on their agreement. B Bops can terminate the agreement by providing written notice to the developer. If the default involves events specified in paragraphs (1) through (6) of the agreement, where no right to cure exists, the termination is effective immediately upon the developer's receipt of the notice. However, if the default is related to an event specified in paragraph (7), the termination becomes effective 30 days after the developer receives written notice, provided the default is not resolved to B Bops' satisfaction within that period.
Upon termination or expiration of the agreement, the developer's rights to develop B Bops restaurants become void, and they must stop any further attempts to select or develop sites for units. The developer cannot establish or operate any unit if a Unit Franchise Agreement has not been executed before the termination or expiration. However, termination of the development agreement does not affect the developer's rights to operate existing units under a Unit Franchise Agreement, unless that agreement is separately terminated according to its own terms.
Specifically, B Bops is entitled to retain the balance of the development fee that has not been applied to initial franchise fees before the termination or expiration. Additionally, B Bops 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 existing Unit Franchise Agreement between B Bops and the developer. This means that B Bops can continue to expand in the area, even after the development agreement is terminated, potentially competing with the former developer unless the Unit Franchise Agreements provide specific protections.