Does the B Bops non-compete agreement prevent a franchisee from indirectly engaging in a similar business?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
That during the Term of this Agreement, Franchisee, its directors, officers, shareholders, partners, members, employees and agents will not, directly or indirectly, enter into or engage in any business as a director, officer, shareholder, proprietor, partner, consultant, employee or in any other position or capacity, which business is engaged at any location in a business the same as or substantially similar to that of a B-Bop's Restaurant (except for any other B-Bop's Restaurant owned and operated by Franchisee pursuant to a franchise agreement with Company);
- B.
That for a period of two (2) years immediately following the termination or expiration of this Agreement, Franchisee, its directors, officers, shareholders, partners, members, employees and agents will not, directly or indirectly, enter into or engage in any business as a director, officer, shareholder, proprietor, partner, consultant, employee or in any other position or capacity, which business is engaged in a business the same as or substantially similar to that of a B-Bop's Restaurant within: (i) a twenty (20) mile radius of the Franchise Premises; or (ii) a twenty (20) mile radius of any other B-Bop's Restaurant then in operation or under development (except for any other B-Bop's Restaurant owned and operated by Franchisee pursuant to a franchise agreement with Company);
- C.
That during the Term of this Agreement and for a period of two (2) years thereafter, Franchisee, its directors, officers, shareholders, partners, members, employees or agents acting individually or through others, will not, directly or indirectly: (i) employ (or contact or solicit for the purpose of seeking to employ) any then current employee of Company or of any other franchisee; (ii) request that any customer of Company or any other franchisee cancel or terminate their business or their relationship with Company or such other franchisee; or (iii) request that any other authorized franchisee of Company cancel or terminate its relationship with Company;
- D.
For purposes of this Section 17, a business will be deemed to be the "same as or substantially similar to a B-Bop's Restaurant" if it is engaged in preparing and serving to the public any food item from time to time included as a standard menu item for a B-Bop's Restaurant.
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2025 FDD)
According to B Bops's 2025 Franchise Disclosure Document, the non-compete agreement restricts a franchisee from directly or indirectly engaging in a similar business. During the term of the franchise agreement, the franchisee, including its directors, officers, shareholders, partners, members, employees, and agents, are prohibited from participating in any business that is the same as or substantially similar to a B Bops Restaurant. This restriction applies to any location, except for other B Bops Restaurants owned and operated by the franchisee under a separate franchise agreement with the company.
Following the termination or expiration of the franchise agreement, the non-compete extends for two years. During this period, the franchisee and its associated parties are restricted from engaging in a similar business within a 20-mile radius of the former franchise location or any other B Bops Restaurant in operation or under development. This post-term restriction also includes indirect involvement as a director, officer, shareholder, proprietor, partner, consultant, or employee.
The FDD defines a business as "the same as or substantially similar to a B-Bop's Restaurant" if it involves preparing and serving any food item that is part of B Bops's standard menu. These restrictions are designed to protect B Bops's market and confidential information, ensuring that former franchisees do not use their knowledge to compete against the franchise system. A franchisee must also not employ or solicit current employees of B Bops or other franchisees, or interfere with the relationships between B Bops, its franchisees, and their customers.