What is the dependency between the Application Agreement and the Development Agreement for B Bops?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
To apply for purchase of development rights, you must sign and submit an Application Agreement to the Company, accompanied by a deposit of $5,000. The amount of the deposit is uniform as to all persons currently applying to purchase development rights from the Company. Upon submission of the deposit and Application Agreement, the Company will provide certain services (specified in Item 11 hereof) to assist you in assessing the feasibility of purchasing the development rights if Company determines that such rights should be granted. The Company has absolute discretion in determining whether the development rights will be granted. You will be notified by the Company 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).
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.
6. OTHER FEES
SINGLE-UNIT ARRANGEMENT
| Type of Fee1 | Amount | Due Date | Remarks | |
|---|---|---|---|---|
| Royalty and service fee | 5% of gross sales.2, | Payable monthly on the 20th day of each month. |
| Late fee and interest on past due payments | $200 plus interest at 1.5% per month (or, if less, the maximum rate permitted by applicable state law) on amounts past due. | As incurred. | Any payment not received by the Company on or before its due date is deemed to be past due.
Source: Item 5 — INITIAL FEES (FDD pages 12–14)
What This Means (2025 FDD)
According to B Bops's 2025 Franchise Disclosure Document, the Application Agreement is a prerequisite to obtaining a Development Agreement for a multiple-unit arrangement. To pursue development rights, a prospective franchisee must first sign and submit an Application Agreement, accompanied by a $5,000 deposit. This deposit is uniform for all applicants seeking development rights. B Bops then assesses the feasibility of granting these rights, a decision made at their absolute discretion. The applicant will be notified in writing of B Bops's decision within 90 days, although this period can be extended at B Bops's discretion.
If B Bops decides to grant development rights, the $5,000 deposit is then applied toward the development fee. The development fee is calculated by multiplying $5,000 by the number of franchises to be developed according to the development schedule. A sum of $5,000 of the development fee will be allocated towards satisfaction of the initial franchise fee payable for each franchise established under the Development Agreement. If the applicant is not granted the development rights, a portion of the $5,000 deposit will be refunded, minus certain expenses incurred by B Bops during the application review process. These expenses include either $4,500 or the actual costs incurred by B Bops, including travel, lodging, and a $100 hourly fee for office time, whichever is less.
If a franchisee already owns an existing B Bops franchise, they are not required to execute an Application Agreement or pay a deposit when purchasing an additional franchise. This process ensures that B Bops can evaluate potential developers before committing to a multiple-unit arrangement, while also providing a mechanism for compensating B Bops for its time and expenses if the development rights are not ultimately granted. The initial $5,000 deposit serves as a commitment from the applicant and covers the initial assessment phase, with the possibility of a partial refund if the agreement is terminated or rights are not granted.