What happens to the B Bops development rights if the agreement is terminated?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
- 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's 2025 Franchise Disclosure Document, upon termination or expiration of the Development Agreement, the developer's rights to develop B Bops restaurants become null and void. The developer must immediately stop any efforts to select or develop sites for new units. They cannot establish or operate any B Bops unit if a Unit Franchise Agreement hasn't been executed by B Bops before the termination or expiration date.
However, the termination or expiration of the Development Agreement does not affect the developer's rights to operate existing B Bops units under already-executed Unit Franchise Agreements, until those agreements are separately terminated according to their own terms. B Bops is entitled to retain any remaining balance of the development fee that hasn't been applied to initial franchise fees before the termination or expiration.
Furthermore, B Bops has the right to establish or license others to establish B Bops restaurants in the trade area, unless limited by the terms of any existing Unit Franchise Agreements with the developer. This means that after termination, B Bops can grant new franchises in the area originally assigned to the developer, potentially creating competition unless the existing Unit Franchise Agreements provide territorial protection.