What agreement must be executed to trigger the payment of the initial franchise fee for a B Bops franchise?

[Item 5: INITIAL FEES]

SINGLE-UNIT ARRANGEMENT

Initial Franchise Fee. The amount of the initial franchise fee to be paid for the purchase of one Franchise under the single-unit arrangement depends on whether you already own and operate an existing Franchise. If you do not own an existing Franchise, the initial franchise fee is $30,000. Of that amount, a $5,000 deposit (described below) must be paid when you submit an executed Application Agreement (Exhibit E hereto) to the Company for the purchase of a Franchise. If the Company decides to grant you a Franchise, you must pay the remaining $20,000 of the initial franchise fee when you execute the Franchise Agreement.

If you already own and operate an existing Franchise, the initial franchise fee is $25,000. This amount must be paid when you execute the Franchise Agreement for the additional Franchise.

Except under the limited circumstances discussed below, the initial franchise fee is not refundable, in whole or in part, under any circumstances. Except as discussed above, the initial franchise fee for Franchises purchased under the Company's single-unit arrangement is uniform in all cases.

The Company also provides opening assistance for a period of between three and five days prior to the opening of the Franchise and for a period of four to six days immediately following the opening of the Franchise as a part of the Franchise Fee. You are required to pay for all round trip airline and hotel expenses incurred by the Company for its representatives providing the opening assistance.

[Item 5: INITIAL FEES]

Initial Franchise Fee. The initial franchise fee payable for the first Franchise established under the multiple-unit arrangement is $30,000. The Company's opening assistance for a period of between three and five days prior to the opening of the Franchise and for a period of four to six days immediately following the opening of the Franchise (other than the Company's out-ofpocket costs for airline and hotel expenses for the people provided by the Company for the opening assistance) is provided by the Company as a part of the initial franchise fee. See Item 11 for more information on opening assistance. Each additional Franchise established under the multiple-unit arrangement requires payment of an initial franchise fee of $20,000. The initial franchise fee for each Franchise is required to be paid to the Company upon execution of the then current franchise agreement granting you the right to establish the Franchise. As noted above, $5,000 of the development fee will be applied by the Company toward the initial franchise fee payable for each Franchise established under the Development Agreement. The initial franchise fee for Franchises purchased under the multiple-unit arrangement is uniform in all cases. Except as noted below, such fee is not refundable, in whole or in part, under any circumstances. You must pay, on demand, any out-of-pocket airline and hotel expenses incurred by the Company to provide the opening assistance, and none of those costs will be refundable.

Development Fee. If you elect to purchase development rights under the multiple-unit arrangement, you must pay the Company a development fee. The amount of the development fee will vary and will be determined by multiplying $5,000 times the number of Franchises to be developed according to the development schedule. The sum of $5,000 of the development fee will be allocated towards satisfaction of the initial franchise fee payable for each Franchise established under the Development Agreement. If you establish all of the Franchises specified in the development schedule, the entire development fee will be applied towards payment of the initial franchise fees due to the Company. If you fail to comply with the development schedule (or otherwise default under the Development Agreement) and the Development Agreement is terminated, the Company will be entitled to retain that portion of the development fee that has not been applied towards payment of initial franchise fees prior to such termination. The development fee must be paid upon execution of the Development Agreement. You will receive a credit of $5,000 toward payment of such fee from the deposit paid upon execution of the Application Agreement (see below). Except as noted below, the development fee is not refundable in whole or in part under any circumstances.

Source: Item 5 — INITIAL FEES (FDD pages 12–14)