What conditions must be met for B Bops to consider a signed or oral agreement a contract?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
Identify the contract with a customer. The Company generally considers a contract with a customer to be a signed or oral agreement to enter into a franchise agreement/contract provided that collection is considered probable, which is assessed based on the creditworthiness of the customer as determined by credit checks, payment histories, and/or other circumstances.
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 52–53)
What This Means (2025 FDD)
According to B Bops's 2025 Franchise Disclosure Document, the company generally considers a contract with a customer to be a signed or oral agreement to enter into a franchise agreement/contract. However, this is contingent on collection being considered probable.
B Bops assesses the probability of collection based on the creditworthiness of the customer. This assessment involves conducting credit checks, reviewing payment histories, and considering other relevant circumstances to determine if the potential franchisee is likely to meet their financial obligations under the franchise agreement.
This means that even with a signed or oral agreement, B Bops will only recognize it as a valid contract if they are reasonably confident that the franchisee will be able to fulfill their payment obligations. This protects B Bops from entering into agreements with individuals or entities that may be at high risk of default, ensuring the financial stability of the franchise system.