What happens after the Company approves a proposed site in the trade area for a B Bops franchise?

Upon the Company's approval of a proposed site in the trade area (and assuming you are in compliance with the Development Agreement and all franchise agreements), the parties will enter into the then current form of franchise agreement, granting you the right to own and operate a Franchise at the specified site. Any franchise agreement executed pursuant to the Development Agreement will survive the termination or expiration of the Development Agreement and continue to govern the rights of the parties with respect to that particular Franchise for the remainder of its term. Under the provisions of each franchise agreement, you will be granted an exclusive territory providing certain territorial rights for the particular Franchise being established. In the event of termination or expiration of the Development Agreement, the exclusive territorial rights granted under the surviving franchise agreement will remain in effect for the remainder of the term of the Franchise, during which time the Company and its affiliates will be precluded from establishing any company-owned B-Bop's Restaurant in the exclusive territory or granting a Franchise to any third party to be located in the exclusive territory. The territorial rights granted under the current Franchise Agreement are discussed above.

The Developer is required by the Development Agreement to submit its financial statements to the Company for review and to consult with the Company regarding its proposals for financing development of the Franchises, all at the request of the Company from time to time.

The continuation of your exclusive rights in the trade area are not dependent on achieving a particular sales volume or market penetration at any Franchise or on any other contingency. As noted above, however, the continuation of such rights is dependent upon your compliance with the development schedule.

Source: Item 12 — TERRITORY (FDD pages 33–35)