Does the termination of the B Bops franchise agreement affect obligations that expressly survive?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee acknowledges that the time and geographic restrictions set forth herein are fair and reasonable restrictions that provide necessary protection of
Company's interest in the Licensed System, the Licensed Marks and Company's ability to sell additional franchises. In the event Franchisee is a natural person, Franchisee represents and warrants that he has available to him sufficient other means of support and that observance of the covenants contained in this Section 17 will not deprive him of his ability to earn a livelihood or support his dependents. The provisions of this Section 17 shall survive the termination or expiration of this Agreement.
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2025 FDD)
According to B Bops's 2025 Franchise Disclosure Document, certain obligations do survive the termination or expiration of the franchise agreement. Specifically, the non-compete and non-disclosure covenants outlined in Section 17 of the agreement remain in effect for a period of two years following the termination or expiration. This means that even after the franchise agreement ends, the franchisee is still bound by these restrictions.
These surviving obligations have significant implications for a former B Bops franchisee. The franchisee is restricted from engaging in any business that is the same as or substantially similar to a B Bops restaurant within a 20-mile radius of the former franchise location or any other B Bops restaurant. Additionally, the franchisee is prohibited from employing or soliciting employees of B Bops or other franchisees, and from interfering with the relationships between B Bops and its customers or other franchisees. These restrictions are designed to protect B Bops's interests in its licensed system and trademarks.
The FDD states that these time and geographic restrictions are considered fair and reasonable for protecting B Bops's interests. The franchisee acknowledges that they have sufficient means of support and that complying with these covenants will not deprive them of their ability to earn a livelihood. This acknowledgement suggests that B Bops has considered the potential impact of these restrictions on the franchisee's future opportunities.
It is important for prospective B Bops franchisees to carefully review Section 17 of the franchise agreement to fully understand the scope and duration of these post-termination obligations. Franchisees should also consider the potential impact of these restrictions on their future business endeavors and ensure that they are comfortable with the limitations imposed.