Does B Bops have a right of first refusal to acquire my development rights?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
| M. Conditions for the Company approval of transfer | Section 13 | Proposed transferee must satisfy the Company's current standards for new developers; assumption of Development Agreement; execution of general release (to the extent permitted by Minnesota law) and nondisclosure and noncompetition agreement; payment of $3,000 transfer fee; compliance with transfer provisions of Franchise Agreement if any Franchises simultaneously being transferred; and compliance with right of first refusal granted to the Company. |
|---|---|---|
| N. The Company's right of first refusal to acquire your development rights | Section 13(D) | The Company has the right to purchase the development rights or any ownership interest in the entity owning the development rights upon the same terms and conditions as contained in any bona fide offer received from a third party. |
| O. The Company's option to | None | Not applicable. |
| purchase your development | ||
| rights | ||
| P. Your death or disability | Section 13(B) | The development rights, or any controlling interest in any entity owning the development rights, must be transferred to an approved transferee, with the Company to be notified of the proposed transferee within six (6) months of death or disability. |
| Q. Non-competition covenants | Section 12 | No involvement in a business substantially |
| during the term of the | similar to a B-Bop's Restaurant at any | |
| Development Agreement | location. | |
| R. Non-competition covenants after the development rights are terminated or expire | Section 12 | No involvement in a business substantially similar to a B-Bop's Restaurant for two (2) years after termination or expiration within: (i) the trade area specified in the Development Agreement; or (ii) 20 miles of any other B-Bop's Restaurant then in operation or under development, except that you will be entitled to continue to operate any B-Bop's Restaurant pursuant to a Franchise Agreement entered into with the Company prior to termination or expiration of the development rights. |
| S. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 40–49)
What This Means (2025 FDD)
According to B Bops's 2025 Franchise Disclosure Document, B Bops does have a right of first refusal to acquire a franchisee's development rights. Specifically, B Bops has the right to purchase the development rights or any ownership interest in the entity owning the development rights. This purchase would be under the same terms and conditions as any legitimate offer received from a third party. This is detailed in Section 13(D) of the Development Agreement.
This right of first refusal means that if a franchisee receives an offer from a third party to buy their development rights, they must first offer those same terms to B Bops. B Bops can then choose to match the offer and purchase the rights themselves, effectively blocking the sale to the third party.
Additionally, Section 13 outlines other conditions related to the transfer of development rights. These include the proposed transferee meeting B Bops's standards for new developers, assuming the Development Agreement, executing a general release and non-disclosure/non-competition agreement, paying a $3,000 transfer fee, and complying with the transfer provisions of the Franchise Agreement if any franchises are simultaneously being transferred. These stipulations ensure that B Bops maintains control over who becomes a developer within their system and that any transfer meets their standards.