Which obligations of the B Bops franchisee survive the termination of the agreement?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee acknowledges that the time and geographic restrictions set forth herein are fair and reasonable restrictions that provide necessary protection of
Company's interest in the Licensed System, the Licensed Marks and Company's ability to sell additional franchises. In the event Franchisee is a natural person, Franchisee represents and warrants that he has available to him sufficient other means of support and that observance of the covenants contained in this Section 17 will not deprive him of his ability to earn a livelihood or support his dependents. The provisions of this Section 17 shall survive the termination or expiration of this Agreement.
EVENTS UPON TERMINATION OR EXPIRATION.
Upon termination of this Agreement, or upon expiration of the Term of this Agreement without renewal, Franchisee agrees as follows:
- A.
Franchisee shall no longer be entitled to operate a B-Bop's Restaurant on the Franchise Premises or at any other location, nor in any other manner at any location whatsoever utilize all or any portion of the Licensed System (including, but not limited to, the proprietary recipes) or any of the Licensed Marks, provided that termination or expiration of this Agreement shall not affect the right of Franchisee to operate any other B-Bop's Restaurant in accordance with the terms of a franchise agreement between the parties;
- B.
Franchisee shall cease to hold itself out to the public as being a B-Bop's Restaurant and shall avoid any other conduct which would suggest or indicate any relationship between Company and Franchisee, except to the extent permitted by paragraph A above;
- C.
Franchisee shall pay Company or its affiliates on demand all fees and
amounts then owing to Company or its affiliates under the terms of this Agreement and any other amounts owing to Company or its affiliates under any other agreement relating to the Franchise;
- D.
Franchisee shall immediately discontinue all use and display of the Licensed Marks and shall remove from the Franchise Premises any and all signs, emblems, fixtures, furniture, supplies, promotional materials, stationery, printed forms or other materials which display any of the Licensed Marks or feature any of the distinguishing characteristics of the Licensed System;
- E.
Franchisee shall, at its sole expense, immediately make such modifications to the exterior and interior of the Franchise Premises as Company shall reasonably request to effectively distinguish the Franchise Premises from its former appearance and from the appearance of any other B-Bop's Restaurant, including, without limitation, discontinuing use of the unique blue color scheme which is a distinguishing characteristic of the Licensed System.
- 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;
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2025 FDD)
According to B Bops's 2025 Franchise Disclosure Document, several obligations of the franchisee survive the termination or expiration of the franchise agreement. These include ceasing operation as a B Bops restaurant, discontinuing the use of licensed marks, and modifying the franchise premises to differentiate it from a B Bops restaurant. The franchisee must also pay all outstanding fees and amounts owed to B Bops or its affiliates.
For a period of two years after termination or expiration, the franchisee is restricted from engaging in any business that is the same as or substantially similar to a B Bops restaurant within a 20-mile radius of the former franchise premises or any other B Bops restaurant. This restriction applies to the franchisee, its directors, officers, shareholders, partners, members, employees, and agents. Similarly, for two years post-termination, the franchisee is prohibited from employing or soliciting employees of B Bops or other franchisees, and from interfering with the relationships between B Bops and its customers or other franchisees.
These post-termination obligations are designed to protect B Bops's interests in its licensed system and trademarks, as well as its ability to sell additional franchises. The FDD states that these restrictions are considered fair and reasonable. If a court finds the time period or geographic area of the non-compete agreement to be excessive, the parties agree to accept a reasonable determination made by the court. For individuals acting as a franchisee, they must have sufficient means of support to ensure that these restrictions do not deprive them of their ability to earn a livelihood.