What are the restrictions on the Company regarding operating or franchising a B Bops Restaurant within a one-mile radius of existing B-Bop's Restaurants operated by B-Bop's?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
Material Agreements. There are no agreements currently in effect which significantly limit the rights of the Company to use or license the use of the Licensed Marks in any manner material to the Franchise. Effective as of March 17, 1995, B-Bop's assigned ownership of the Licensed Marks and the Licensed System to the Company to enable the Company to franchise the B-Bop's Restaurant concept. As partial consideration for the assignment, the Company entered into a license agreement with B-Bop's granting a license to B-Bop's to use the Licensed Marks and the Licensed System in connection with operation of a B-Bop's Restaurant at any location with respect to which the Company has not previously granted exclusive development rights or exclusive franchise rights to construct and operate a B-Bop's Restaurant. B-Bop's is prohibited under the terms of the license agreement from sublicensing any rights in the Licensed Marks or the Licensed System to any third party or from assigning the license agreement to any third party without the prior written consent of the Company. The license agreement prohibits the Company from owing or operating a B-Bop's Restaurant, or granting development or franchise rights for operation of a B-Bop's Restaurant, at any location within a one mile radius of: (i) any B-Bop's Restaurant operated by B-Bop's; or (ii) any location at which B-Bop's has informed the Company in writing of its plans to develop a B-Bop's Restaurant within a one year period from the date of such notice.
Source: Item 13 — TRADEMARKS (FDD pages 35–37)
What This Means (2025 FDD)
According to B Bops's 2025 Franchise Disclosure Document, the company faces specific restrictions regarding the operation or franchising of B Bops restaurants within a one-mile radius of existing B-Bop's restaurants. These restrictions stem from a license agreement between the Company and B-Bop's, effective as of March 17, 1995, where B-Bop's assigned ownership of the Licensed Marks and the Licensed System to the Company to enable the Company to franchise the B-Bop's Restaurant concept. As partial consideration for the assignment, the Company entered into a license agreement with B-Bop's granting a license to B-Bop's to use the Licensed Marks and the Licensed System in connection with operation of a B-Bop's Restaurant.
Specifically, the license agreement prohibits the Company from owning or operating a B Bops Restaurant, or granting development or franchise rights for operation of a B Bops Restaurant, at any location within a one-mile radius of either: (i) any B Bops Restaurant operated by B-Bop's; or (ii) any location at which B-Bop's has informed the Company in writing of its plans to develop a B Bops Restaurant within a one-year period from the date of such notice.
This restriction is significant for prospective B Bops franchisees as it limits the areas where the company can grant new franchises. Before investing, franchisees should confirm that their desired location is not within this restricted zone to avoid potential conflicts or limitations on their franchise rights. This also highlights the importance of understanding the historical agreements and relationships between the company and its predecessors, as these can directly impact the current franchising landscape.