What happens to existing B Bops Unit Franchise Agreements 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, the termination or expiration of the Development Agreement does not impact the rights of the developer to operate any B Bops unit, as long as they adhere to the terms outlined in the Unit Franchise Agreement. The Unit Franchise Agreement remains in effect until it is terminated according to its own terms. This means that even if the Development Agreement ends, franchisees can continue running their established B Bops restaurants under the original franchise terms.
However, upon the termination or expiration of the Development Agreement, the developer's rights to further select or develop new sites for B Bops units are immediately nullified. The developer cannot establish or operate any new unit if a Unit Franchise Agreement has not been executed by B Bops prior to the termination or expiration of the Development Agreement. Furthermore, B Bops retains the right to establish or license others to establish B Bops restaurants within the trade area, unless the terms of an existing Unit Franchise Agreement limit this right.
This arrangement provides a level of security for franchisees who have already invested in and established B Bops units, as their franchise operations are protected by the Unit Franchise Agreement. However, it also means that the developer loses the opportunity to expand their B Bops business within the designated area if the Development Agreement is terminated or expires, potentially limiting their future growth prospects with the franchise.