What happens if the B Bops developer fails to comply with the development schedule?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
Under the Development Agreement, you will be granted the exclusive right to establish Franchises in a defined trade area at sites to be approved by the Company. The exact size and boundaries of the trade area will be negotiated between the parties prior to execution of the Development Agreement, with the agreed upon definition of such trade area to be attached as an appendix thereto. The Company contemplates that the trade area will be defined by reference to various streets and highways forming the boundaries of the area and may consist of a portion of a city or county or may include one or more counties or cities. In exchange for the grant of the exclusive development rights, you are required to establish a specified number of Franchises in accordance with a development schedule negotiated between the parties and set forth as an appendix to the Development Agreement. So long as you comply with the development schedule and the Development Agreement otherwise remains in effect, the Company and its affiliates are prohibited from establishing any company-owned B-Bop's Restaurant in the trade area or from granting any third party the right to establish a Franchise in such trade area. Upon termination of the Development Agreement, however, your exclusive development rights are rescinded and, except as noted below with respect to any exclusive territory granted for individual Franchises already established, the Company is thereafter entitled to develop the trade area itself or to grant such right to third parties. The development schedule will supersede the terms of any franchise agreement with respect to the allowable period of time for construction
and opening of any Franchise developed pursuant to the Development Agreement.
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.
Source: Item 12 — TERRITORY (FDD pages 33–35)
What This Means (2025 FDD)
According to B Bops's 2025 Franchise Disclosure Document, if a developer fails to comply with the development schedule outlined in the Development Agreement, their exclusive development rights are rescinded. This means that B Bops is no longer prohibited from establishing company-owned restaurants or granting franchises to third parties within the previously defined trade area. This provision encourages developers to adhere to the agreed-upon schedule for opening new franchise locations.
However, it's important to note that any franchise agreements already executed under the Development Agreement will survive its termination or expiration. These existing franchise agreements will continue to govern the rights of the parties for the remainder of their terms. This means that even if the Development Agreement is terminated, the exclusive territorial rights granted to individual franchises already established will remain in effect, preventing B Bops from opening company-owned restaurants or granting franchises to others within those specific territories.
Furthermore, the FDD states that the continuation of exclusive rights in the trade area is dependent upon compliance with the development schedule. This underscores the importance of meeting the agreed-upon milestones for opening new B Bops locations. The development schedule itself will supersede the terms of any franchise agreement with respect to the allowable period of time for construction and opening of any Franchise developed pursuant to the Development Agreement.