What restriction is placed on the undersigned regarding the transfer of the B Bops franchise or ownership interest in the franchisee?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
In consideration of the Franchise granted to Franchisee hereunder and in order to induce Company to grant such Franchise to Franchisee, each of the undersigned hereby agrees, jointly, individually and severally, for themselves, their heirs, legal representatives and assigns as follows: (a) that they, and each of them, shall be personally bound by and agree to perform all of the terms, provisions and conditions of this Agreement; (b) that they, and each of them, do hereby personally and unconditionally guarantee full and prompt payment to Company or its affiliates of any indebtedness of Franchisee arising under or by virtue of this Agreement or any other agreement between the parties relating to the Franchise granted under this Agreement; (c) that they, and each of them, will not sell, assign or otherwise permit or cause a transfer of the Franchise or any ownership interest in Franchisee without complying with the requirements of this Agreement; (d) that they, and each of them, shall be personally bound by the nondisclosure and noncompete covenants set forth in this Agreement; and (e) that they, and each of them, shall be personally liable for the breach of any provision of this Agreement, including both monetary obligations and any obligation to take or refrain from taking specific actions or activities.
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- ASSIGNMENT BY FRANCHISEE. Franchisee acknowledges that the rights and duties created pursuant to this Agreement are personal to Franchisee and its owners and that Company has granted the Franchise in reliance upon the character, skill, business ability, financial capacity and attitude of Franchisee and its owners. Therefore, without the prior written approval of Company, neither this Agreement nor the Franchise (or any interest therein), nor any controlling ownership interest in Franchisee, may be directly or indirectly, voluntarily or by operation of law, sold, assigned, conveyed, sublet, subfranchised or otherwise transferred to any person or entity. Any sale, assignment, conveyance, subfranchising or other transfer, including, without limitation, any transfer or issuance of capital stock or partnership or membership interests in Franchisee, any merger or consolidation, any transfer by decree in any divorce proceeding or by will or inheritance upon death of Franchisee or any owner thereof (hereinafter collectively referred to as "transfer") in violation of this Section 19 shall be void and confer no rights upon any third person. Company shall not unreasonably withhold its consent to any transfer when requested, provided that such transfer complies with the following requirements that may be applicable to the particular type of transfer:
If Franchisee is a partnership, corporation or limited liability company, Franchisee agrees to notify Company of any change in ownership interests in Franchisee which, when taken alone or together with all previous or simultaneous changes of ownership during the Term hereof, constitutes a change of ten percent (10%) or more of the ownership interests in Franchisee.
Any change in ownership interests which, when taken alone or together with all previous or simultaneous changes in ownership during the Term hereof, constitutes a change of fifty percent (50%) or more of the ownership interests in Franchisee shall be considered a transfer subject to the provisions of Section 19(C) and 19(D) hereof.
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Death or Disability of Franchisee.
In the event of death or permanent mental or physical disability of Franchisee, or any partner, shareholder or member owning a controlling interest in Franchisee, the legal representative of Franchisee, or such partner, shareholder or member thereof, together with all surviving partners, shareholders or members, if any, jointly, shall, within six (6) months of such event apply in writing for the right to transfer the Franchise, or the controlling ownership interest of the deceased or disabled partner, shareholder or member in Franchisee, to such person or persons as the legal representative may specify.
Consent to such transfer (including transfers by devise or inheritance) will not unreasonably be withheld by Company, provided that Company may in its discretion require that such transfer comply with one or more of the conditions set forth in Section 19(C) hereof, except that: (i) payment of the transfer fee shall not be required; and (ii) the legal representative need not comply with Company's right of first refusal if the transferee is a member of the immediate family of Franchisee or to a member of the immediate family of the deceased or disabled partner, shareholder or member.
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2025 FDD)
According to B Bops's 2025 Franchise Disclosure Document, if an individual signs a personal guarantee, they agree not to sell, assign, or otherwise permit or cause a transfer of the B Bops franchise or any ownership interest in the franchisee without complying with the requirements of the Franchise Agreement. This means that anyone who personally guarantees the franchise's obligations must adhere to the transfer provisions outlined in the agreement.
B Bops requires that the franchisee obtain prior written approval from them before any direct or indirect transfer of the franchise, any interest in the franchise, or any controlling ownership interest in the franchisee. This includes sales, assignments, conveyances, sublicensing, or other forms of transfer, such as the issuance of capital stock, partnership interests, membership interests, mergers, consolidations, or transfers due to divorce or inheritance. Any transfer that doesn't comply with these requirements is considered void.
If the franchisee is a partnership, corporation, or limited liability company, they must notify B Bops of any change in ownership that, alone or combined with previous changes, amounts to 10% or more of the ownership interests. A change of 50% or more is treated as a transfer subject to specific conditions outlined in the agreement. This ensures B Bops maintains control over who owns and operates its franchises.
In the event of the death or disability of a franchisee or a partner, shareholder, or member owning a controlling interest, the legal representative has six months to apply for the right to transfer the franchise or the ownership interest. B Bops will not unreasonably withhold consent, but may require compliance with certain conditions, except that the transfer fee is waived if the transfer is to an immediate family member. This provides a mechanism for transferring the franchise in unforeseen circumstances while still protecting B Bops's interests.