What is the consequence if the B Bops Development Agreement is terminated for reasons other than default by the franchisee?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
If you fail to comply with the development schedule (or otherwise default under the Development Agreement) and the Development Agreement is terminated, the Company will be entitled to retain that portion of the development fee that has not been applied towards payment of initial franchise fees prior to such termination. The development fee must be paid upon execution of the Development Agreement. You will receive a credit of $5,000 toward payment of such fee from the deposit paid upon execution of the Application Agreement (see below). Except as noted below, the development fee is not refundable in whole or in part under any circumstances.
Source: Item 5 — INITIAL FEES (FDD pages 12–14)
What This Means (2025 FDD)
Based on the 2025 B Bops Franchise Disclosure Document, the document does not specify the consequences if the Development Agreement is terminated for reasons other than default by the franchisee. The FDD does mention the consequences if the franchisee defaults. Specifically, if a franchisee fails to comply with the development schedule or otherwise defaults under the Development Agreement, B Bops is entitled to retain the portion of the development fee that has not been applied towards payment of initial franchise fees before the termination. The development fee is generally not refundable in whole or in part under any circumstances, except as noted in the document.
However, the FDD does outline the refund policy for the Application Agreement. If B Bops determines not to grant development rights, or if either party terminates the Application Agreement before a decision is made, a portion of the $5,000 deposit will be refunded after the franchisee returns any confidential information. The refund will be the deposit amount minus the lesser of $4,500 or the actual expenses incurred by B Bops, including travel, lodging, and a $100 hourly fee for office time.
Since the document does not specify the consequences of termination outside of franchisee default, it is important for a prospective franchisee to seek clarification from B Bops regarding the specific terms and conditions under which a Development Agreement could be terminated by B Bops and what financial implications that would have. This information is crucial for making an informed investment decision.