What happens to the B Bops development rights upon termination or expiration of the Development Agreement?
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 the termination or expiration of the Development Agreement, the development rights granted to the developer become null and void. The developer must immediately stop any further attempts to select or develop sites for B Bops restaurants, unless a Unit Franchise Agreement has already been executed by B Bops prior to the termination or expiration.
However, the termination or expiration of the Development Agreement does not affect the developer's rights to operate any B Bops unit for which a Unit Franchise Agreement is already in place, as long as that Unit Franchise Agreement remains in effect according to its own terms. This means that if a developer has already opened a B Bops restaurant under a separate franchise agreement, they can continue to operate that restaurant even if the Development Agreement is terminated or expires.
B Bops is entitled to retain any remaining balance of the development fee that has not been applied towards initial franchise fees before the termination or expiration of the Development Agreement. Furthermore, 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, potentially in competition with the former developer, unless the existing franchise agreements prevent it.