Does the B Bops non-compete apply to businesses 'indirectly' similar to a B Bops Restaurant after the agreement terminates?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
- A. Developer hereby agrees that during the term of this Agreement, Developer, its directors, officers, shareholders, partners, members, principals or agents will not, directly or indirectly, enter into or engage in any business the same as or substantially similar to a B-Bop's Restaurant, except for any Unit owned and operated by Developer pursuant to a Unit Franchise Agreement entered into between the parties hereto.
- B. Developer hereby agrees that for a period of two (2) years immediately following the termination or expiration of this Agreement, Developer, its directors, officers, shareholders, partners, members, principals or agents will not, directly or indirectly, enter into or engage in any business the same as or substantially similar to a B-Bop's Restaurant operating at any location within the Trade Area or within a twenty (20) mile radius of any other B-Bop's Restaurant then in operation or under construction, whether owned and operated by Company, any affiliate of Company or by a franchisee under license granted by Company, except that Developer shall be entitled to continue to own and operate any Unit pursuant to a Unit Franchise Agreement entered into between the parties hereto.
- C.
For purposes of this Section 12, a business shall be deemed the "same as or substantially similar to a B-Bop's Restaurant" if the business is engaged in preparing and serving to the public any food items included from time to time as a standard menu item for a B-Bop's Restaurant.
Source: Item 23 — RECEIPTS (FDD pages 53–145)
What This Means (2025 FDD)
According to B Bops's 2025 Franchise Disclosure Document, the non-compete agreement extends to businesses that are either directly or indirectly similar to a B Bops Restaurant. Specifically, for two years after the termination or expiration of the Development Agreement, the developer (franchisee), including its directors, officers, shareholders, partners, members, principals, or agents, cannot engage in any business that is the same as or substantially similar to a B Bops Restaurant. This restriction applies within the Trade Area or within a 20-mile radius of any operating or under-construction B Bops Restaurant. However, the franchisee can continue to operate any Unit under an existing Unit Franchise Agreement.
The definition of a business that is "the same as or substantially similar to a B-Bop's Restaurant" is one that prepares and serves to the public any food items that are part of B Bops's standard menu. This definition is crucial because it clarifies the scope of the non-compete obligation.
This non-compete clause prevents a franchisee from leveraging the knowledge and experience gained while operating a B Bops franchise to directly compete with B Bops shortly after the franchise agreement ends. The geographic limitations (Trade Area or 20-mile radius) and the two-year duration are designed to protect B Bops's market share without unduly restricting the franchisee's ability to pursue other business ventures outside of those specific parameters. Franchisees should carefully consider these restrictions and how they might impact their future business plans.