What happens if a B Bops developer makes an assignment for the benefit of creditors?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
AND TERMINATION.
- A. The occurrence of any of the following events shall constitute a default under this Agreement:
- (1) Developer uses the Licensed System or the Licensed Marks at any location except pursuant to, and in accordance with, a valid and effective Unit Franchise Agreement between the parties covering such location;
- (2) Developer (or any partner, shareholder or member if Developer is a partnership, corporation or limited liability company) is convicted of or pleads guilty to any felony or to any crime relating to operation of any Unit;
- (3) Any assignment made for the benefit of Developer's creditors, any appointment of a receiver, trustee or similar officer for Developer or its assets, the commencement of bankruptcy or other insolvency proceedings by or against Developer, or if Developer is a partnership, corporation or limited liability company, any of the foregoing occur with respect to any partner, shareholder or member of Developer who owns a controlling interest in Developer or who has any responsibility for management of Developer;
Source: Item 23 — RECEIPTS (FDD pages 53–145)
What This Means (2025 FDD)
According to B Bops's 2025 Franchise Disclosure Document, if a developer makes an assignment for the benefit of creditors, it constitutes a default under the Multiple-Unit Development Agreement. This also applies if a receiver, trustee, or similar officer is appointed for the developer or its assets. Furthermore, the commencement of bankruptcy or other insolvency proceedings by or against the developer also constitutes a default. If the developer is a partnership, corporation, or limited liability company, these conditions also apply to any partner, shareholder, or member who owns a controlling interest in the developer or has any responsibility for its management.
Upon the occurrence of any of these default events, B Bops has the right to terminate the Multiple-Unit Development Agreement by providing notice to the developer. This termination is effective immediately upon the developer's receipt of the written notice. This action can be taken by B Bops without affecting any other rights or remedies available to them under the agreement, or as provided by law or equity.
This clause protects B Bops from financial instability or mismanagement on the part of the developer, ensuring that the developer remains a reliable partner in expanding the B Bops brand. For a prospective franchisee, this highlights the importance of maintaining financial stability and adhering to the terms of the development agreement to avoid potential termination and loss of development rights.