How does the termination of a Unit Franchise Agreement affect the B Bops Development Agreement?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 23 — RECEIPTS (FDD pages 53–145)
What This Means (2025 FDD)
According to B Bops's 2025 Franchise Disclosure Document, the termination or expiration of the Development Agreement does not automatically affect the rights of the developer to operate any B Bops unit, as long as the Unit Franchise Agreement is still in effect. The developer can continue to operate the unit under the terms of the Unit Franchise Agreement until that agreement is separately terminated according to its own terms.
However, if the Development Agreement is terminated or expires, the developer loses the right to select or develop new sites for B Bops restaurants. The developer can only operate units for which a Unit Franchise Agreement has already been executed by B Bops before the termination or expiration of the Development Agreement. Any development rights granted under the Development Agreement become null and void.
Furthermore, B Bops retains the right to establish or license others to establish B Bops restaurants in the trade area, except as limited by the terms of any existing Unit Franchise Agreement the developer has with B Bops. This means that while a franchisee can continue to operate existing units under their Unit Franchise Agreements, B Bops is free to expand in the area with other franchisees once the Development Agreement is terminated or expires.