After termination or expiration of the B Bops Development Agreement, is the Company allowed to establish or license others to establish B Bops Restaurants in the Trade Area?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
thin such period.
- C. Upon termination or expiration of this Agreement, the development rights granted hereunder shall become null and void and Developer shall immediately cease any further attempts to select or develop sites on which to construct Units. Developer shall have no right to establish or operate any Unit for which a Unit Franchise Agreement has not been executed by Company prior to termination or expiration hereof. Termination or expiration of this Agreement shall not affect the rights of Developer to operate any Unit in accordance with the terms of any Unit Franchise Agreement which Developer has entered into with Company, until and unless such Unit Franchise Agreement is terminated in accordance with its terms. Developer acknowledges that upon termination or expiration hereof, Company shall be entitled to: (i) retain the balance of the development fee not applied towards initial franchise fees prior to termination or expiration hereof; and (ii) establish, or license others to establish, B-Bop's Restaurants in the Trade Area, except to the extent limited by the terms of any Unit Franchise Agreement executed by Company and Developer.
12. COVENANT NOT TO COMPETE.
- A.
Source: Item 23 — RECEIPTS (FDD pages 53–145)
What This Means (2025 FDD)
According to B Bops's 2025 Franchise Disclosure Document, upon the termination or expiration of the Development Agreement, B Bops has the right to establish or license others to establish B Bops Restaurants in the Trade Area. However, this right is limited by the terms of any Unit Franchise Agreement that B Bops and the developer have executed. This means that if the developer has existing Unit Franchise Agreements, those agreements will take precedence over B Bops's right to establish new restaurants in the area.
This provision protects B Bops's interests by allowing them to continue expanding their brand even after a Development Agreement ends. However, it also acknowledges the existing rights of the developer under any Unit Franchise Agreements. A developer's rights to operate existing units are protected under the terms of the Unit Franchise Agreement, which remains in effect even after the Development Agreement expires or is terminated.
For a prospective B Bops developer, this clause highlights the importance of understanding the interplay between the Development Agreement and the Unit Franchise Agreement. While the Development Agreement grants the right to develop multiple units, the Unit Franchise Agreement governs the operation of each individual restaurant. The developer should carefully review both agreements to understand their rights and obligations, especially in the event of termination or expiration of the Development Agreement. It is also important to note that B Bops cannot establish or license any third party to establish a B Bops Restaurant in the Trade Area prior to the termination or expiration of the Development Agreement.