Can B Bops co-mingle the deposit with other company funds?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
the "Trade Area".
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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, the initial deposit of $5,000 that the applicant provides may be co-mingled with other B Bops funds. This deposit is intended to cover expenses incurred by B Bops for reviewing the application, prospective sites, and providing additional assistance to the applicant.
Co-mingling funds means that B Bops is not required to keep the applicant's deposit in a separate, dedicated account. This is a common practice among franchisors. While it gives B Bops greater flexibility in managing its finances, it also means the deposit is subject to the claims of B Bops's creditors in the event of financial difficulties.
As a prospective franchisee, it's important to understand that the deposit does not earn interest and is used to cover B Bops's expenses during the application review process. If B Bops does not grant the rights to the applicant, or if either party terminates the agreement, the applicant is entitled to a refund of the deposit, less certain expenses incurred by B Bops, such as travel, lodging, and hourly charges for reviewing the application.