What is the consequence if the Company determines not to grant B Bops development rights?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
In the event the Company decides to grant you the development rights, the deposit will be applied toward payment of the development fee. If, on the other hand, the Company determines not to grant such rights, or if the Application Agreement is terminated by either party before a decision on granting the developments rights has been made, a portion of the deposit will be refunded upon return of any confidential information which may have been provided to you by the Company. The refund will be equal to the amount of the 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 the applicant 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 the company decides not to grant development rights, or if the Application Agreement is terminated before a decision is made, a portion of the initial deposit will be refunded. This refund is contingent upon the applicant returning any confidential information provided by B Bops. The refunded amount will be the initial deposit minus the lesser of $4,500 or the actual expenses incurred by B Bops. These expenses include travel, lodging, and a $100 hourly fee for office time spent by the company while providing services under the Application Agreement.
This means that while a full refund of the $5,000 deposit is not guaranteed, B Bops will return the remaining balance after deducting expenses. The expenses deducted could include costs associated with assessing the applicant's feasibility and providing assistance as outlined in Item 11 of the FDD. The Application Agreement can be terminated by either party with written notice, which will also result in a refund of the deposit calculated using the same method.
For a prospective B Bops franchisee, this policy means there is a financial risk involved in applying for development rights. Even if the rights are not granted, B Bops can retain a portion of the deposit to cover their expenses. It is important to carefully review Item 11 of the FDD to understand the services provided during the application process and the associated costs. Franchisees should also keep detailed records of any confidential information received and promptly return it if the agreement is terminated to ensure the refund is processed correctly.
It is also important to note that the company has absolute discretion in determining whether the development rights will be granted. The applicant will be notified in writing within ninety (90) days of submitting the Application Agreement regarding its decision to grant the development rights (unless such period is extended in the Company's discretion).