Are there non-competition covenants during the term of the B Bops agreement?
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. |
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, there are no non-competition covenants during the term of the agreement for a standard franchise agreement. However, a non-competition covenant does exist during the term of the Development Agreement.
Specifically, Item 17 Q states that during the term of the Development Agreement, franchisees cannot be involved in a business substantially similar to a B Bops Restaurant at any location. This prevents a developer from operating or investing in competing businesses while actively developing B Bops locations.
This restriction is common in franchise development agreements to protect the franchisor's interests as the developer builds out the brand's presence in a specific area. Prospective B Bops developers should carefully review Section 12 of the Development Agreement to fully understand the scope and limitations of this non-compete clause.