Does the restriction on engaging in a similar business after termination apply to businesses near B Bops restaurants owned by the company's affiliates?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
- 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.
Source: Item 23 — RECEIPTS (FDD pages 53–145)
What This Means (2025 FDD)
According to B Bops' 2025 Franchise Disclosure Document, the covenant not to compete restricts a developer from engaging in a similar business to B Bops after the termination or expiration of the Development Agreement. This restriction applies within the Trade Area or within a twenty (20) mile radius of any B Bops Restaurant.
Specifically, this restriction extends to B Bops Restaurants that are in operation or under construction, regardless of whether they are owned and operated by the company, an affiliate of the company, or by a franchisee under a license granted by the company. The only exception is if the developer continues to own and operate a Unit pursuant to a Unit Franchise Agreement entered into with B Bops.
This means that after the Development Agreement ends, a former B Bops developer cannot open a competing restaurant within the specified geographic area, even if there are B Bops restaurants nearby that are owned by B Bops' affiliates. This non-compete clause is in effect for a period of two (2) years immediately following the termination or expiration of the Development Agreement.