What is the condition for receiving a refund of the deposit from B Bops if the company does not grant a franchise?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
In the event the Company decides to grant you a Franchise, the deposit will be applied toward payment of the initial franchise fee. If, on the other hand, the Company determines that a Franchise will not be granted, or if either party terminates the Application Agreement before a decision on granting a Franchise has been made, a portion of the deposit will be refunded to you
once you have returned any confidential information which may have been provided to you by the Company. The refund will be equal to the amount of deposit minus the lesser of: (i) $4,500; or (ii) the actual expenses (including travel and lodging expenses and a $100 hourly fee for office time) incurred by the Company in providing the services required under the Application Agreement. The Application Agreement may be terminated by either party at any time by written notice to the other, in which event you will be entitled to a refund of the deposit calculated in accordance with the method described above.
Source: Item 5 — INITIAL FEES (FDD pages 12–14)
What This Means (2025 FDD)
According to B Bops's 2025 Franchise Disclosure Document, if B Bops determines that a franchise will not be granted, a portion of the $5,000 deposit will be refunded to the applicant. However, this refund is conditional. To receive the refund, the applicant must first return any confidential information that B Bops provided.
The amount refunded will be the initial $5,000 deposit minus certain expenses. B Bops will deduct the lesser of two amounts from the deposit: either $4,500, or the actual expenses incurred by B Bops while providing services under the Application Agreement. These actual expenses can include travel and lodging, as well as a $100 hourly fee for office time spent by B Bops.
This means that the refund could be significantly less than the initial $5,000 deposit, depending on the expenses B Bops incurs while assessing the application. In a worst-case scenario, if B Bops's expenses exceed $4,500, the refund would only be $500. Prospective franchisees should carefully consider these potential deductions and understand what services are provided under the Application Agreement to estimate potential costs. Franchisees should also note that either party can terminate the Application Agreement at any time with written notice, which would still entitle the applicant to a refund of the deposit calculated using the same method.