To whom must the transferee's obligations be subordinate in a B Bops franchise transfer?

According to B Bops's 2025 Franchise Disclosure Document, if a franchisee transfers their franchise to a new owner, the agreement between the franchisee and B Bops requires that all financial obligations of the new owner to the original franchisee must be subordinate to the new owner's payment obligations to B Bops. This means B Bops gets paid first.

This requirement protects B Bops's financial interests in the event of a franchise transfer. By ensuring that its payments take priority, B Bops reduces the risk of the new franchisee defaulting on their financial obligations to B Bops. This condition helps B Bops maintain a stable revenue stream from its franchisees, even when ownership changes hands.

For a prospective B Bops franchisee, this condition means that if they plan to sell their franchise in the future and finance any portion of the sale for the buyer, their right to receive payments will be secondary to B Bops's right to receive royalties and other fees. This could increase the risk to the seller if the new owner experiences financial difficulties. Franchisees looking to sell should consider this when negotiating the sale terms and potentially require a larger down payment to offset the risk of subordination.