What happens to the Unit Franchise Agreement upon expiration or termination of the B Bops Development Agreement?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
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 necessarily impact the Unit Franchise Agreement. Specifically, the Unit Franchise Agreement remains in effect, allowing the developer to continue operating the B Bops unit under the terms of that agreement, even after the Development Agreement has ended. This continuation is valid until the Unit Franchise Agreement is terminated according to its own terms.
This provision offers a degree of security to the B Bops developer. Even if the overall development agreement concludes, the developer can continue to operate existing units as long as they adhere to the terms of the Unit Franchise Agreement. This ensures that investments made in established locations are protected, and the developer can continue to generate revenue from those units.
However, it is important to note that while the Unit Franchise Agreement remains in effect, the developer's ability to establish new B Bops units under the expired or terminated Development Agreement ceases. The developer cannot select or develop new sites once the Development Agreement is no longer active, and the company is entitled to establish, or license others to establish, B-Bop's Restaurants in the Trade Area, except to the extent limited by the terms of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.