What happens if a B Bops franchisee defaults in performance of the Development Agreement?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Development | Summary |
|---|---|---|
| Agreement | ||
| A. Term of development | Section 2 | To be negotiated between parties based on |
| Rights | length of development schedule | |
| B. Renewal or extension of the term1 | Section 2 | Any renewal to be on such terms and conditions as the Company and you may mutually agree upon expiration of the original term. |
| C. Requirements for you to | None | Not applicable. |
| renew or extend | ||
| D. Termination by you | None | Not applicable. |
| E. Termination by the Company | None | Not applicable. |
| without cause1 | ||
| F. Termination by the Company with "cause"1 | Section 11 | The Company can terminate if you default in performance of the Development Agreement or if certain other events occur. |
| G. "Cause" defined-curable defaults1 | Section 11 | You will have thirty days after receipt of written notice to cure any default in the performance of any covenant or obligation under the Development Agreement (apart from any obligation as to which no right of cure exists - see below). |
|---|---|---|
| H. "Cause" defined-non-curable defaults1 | Section 11 | Use of the Licensed System or the Licensed Marks at any location except as authorized by a franchise agreement with the Company; insolvency proceedings (including an assignment for the benefit of creditors, appointment of a receiver or similar officer or the commencement of bankruptcy proceedings) involving you or any of your owners who hold a controlling interest or who are responsible for management; conviction or plea of guilty or no contest by you or any of your owners to any felony or any crime relating to operation of any Franchise; any purported transfer of the Development Agreement, the development rights or any ownership interest which fails to comply with Section 13 of the Development Agreement; termination of any franchise agreement with the Company; and any willful or fraudulent misrepresentation to the Company in connection with the development rights. |
| I. Your obligations on termination/non-renewal | Section 11 | Your right to develop additional franchises immediately terminates forfeiture of remaining development fee not previously applied toward initial franchise fees; and loss of exclusive right to develop defined trade area. |
| J. Assignment of contract by the Company | Section 15 | The Company may transfer the Development Agreement, provided the transferee agrees to perform the Company's obligations thereunder. |
| K. "Transfer" by you - defined | Section 13 | Includes any transfer of the Development Agreement, or any transfer of interest or merger in or involving any entity owning the development rights. |
| L. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 40–49)
What This Means (2025 FDD)
According to B Bops's 2025 Franchise Disclosure Document, if a franchisee defaults in the performance of the Development Agreement, B Bops has the right to terminate the agreement. Specifically, Section 11 of the Development Agreement outlines the conditions under which B Bops can terminate the agreement if a franchisee fails to meet their obligations. Additionally, franchisees typically have thirty days after receiving written notice to address and correct any curable default, as detailed in Section 11 of the Development Agreement. However, this cure period does not apply to obligations for which no right of cure exists.
Certain defaults are considered non-curable, meaning they cannot be rectified with a notice period. These non-curable defaults include using the Licensed System or Licensed Marks without proper authorization, involvement in insolvency proceedings, conviction of a felony or crime related to franchise operations, unauthorized transfer of the Development Agreement, termination of any franchise agreement with B Bops, or any willful or fraudulent misrepresentation to B Bops concerning the development rights.
Upon termination due to default, the franchisee's right to develop additional franchises immediately ends. The franchisee will forfeit any remaining development fees that have not yet been applied to initial franchise fees, and they will lose any exclusive right to develop the defined trade area. It is important for prospective B Bops franchisees to carefully review Section 11 of the Development Agreement to fully understand the circumstances that could lead to termination and the associated consequences.