What is the amount of the deposit required by B Bops to cover expenses related to the application for Rights?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Applicant has deposited with Company the sum of $5,000 to cover certain expenses to be incurred by Company in: (i) reviewing Applicant's application for the Rights; (ii) reviewing prospective sites submitted by Applicant for approval; and (iii) providing such additional assistance or information as Company may in its discretion deem appropriate to enable Applicant to determine its interest in providing the Rights. For purposes of this Agreement, the deposit specified above shall be referred to as the "Deposit". Applicant agrees that the Deposit shall not bear interest and that it may be co-mingled with ot
Source: Item 23 — RECEIPTS (FDD pages 53–145)
What This Means (2025 FDD)
According to B Bops's 2025 Franchise Disclosure Document, an applicant must deposit $5,000 with the company to cover expenses related to the application for Rights. These expenses include reviewing the application, reviewing prospective sites, and providing additional assistance or information to help the applicant determine their interest in obtaining the Rights. This deposit does not bear interest and may be co-mingled with other B Bops funds.
This deposit is intended to cover B Bops's costs in evaluating the applicant and potential locations. If B Bops decides to grant the Rights to the applicant, the deposit will be credited toward the initial franchise fee or the development fee, whichever is applicable. However, if B Bops decides not to grant the Rights, or if either party terminates the agreement, the applicant is entitled to a refund of the deposit, minus the lesser of $4,500 or the actual expenses incurred by B Bops. Actual expenses include travel, lodging, living expenses, out-of-pocket expenses, and a $100 per hour charge for office time spent reviewing or preparing information.
It is important to note that the refund is contingent upon the applicant returning all confidential information to B Bops. Failure to do so will result in forfeiture of the entire deposit. This deposit structure is fairly common in franchising, as it protects the franchisor from incurring costs for applications that do not result in a franchise agreement. Prospective franchisees should carefully consider these terms and ensure they understand the conditions for a full or partial refund of the deposit.