Does the deposit for a B Bops franchise application bear interest?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
o negotiate.
-
- If Company, in its sole discretion, determines to grant the Rights to Applicant, the Deposit shall be credited toward the amount required to be paid by Applicant as the initial
franchise fee or the development fee (whichever shall be applicable). If Company determines that the Rights will not be granted to Applicant, or if either party terminates this Agreement, Applicant shall be entitled to a refund (upon return of all confidential information) equal to the Deposit minus the lesser of: (i) Four Thousand Five Hundred Dollars ($4,500); or (ii) the actual expenses incurred by Company in providing the services identified in Section 2 hereof. For purposes of this Section 7, "actual expenses" shall be deemed to include all travel, lodging and other living expenses reasonably incurred by Company personnel, any other out of pocket expenses incurred by Company hereunder and a one hundred dollar ($100.00) per hour charge for office time spent reviewing information submitted by Applicant or preparing information to be furnished to Applicant. Company shall forward any refund to Applicant within ten (10) days after Applicant has returned all confidential information to Company. Failure to return any confidential information shall result in forfeiture of the entire Deposit and in such other action as Company may in its discretion deem appropriate.
-
- If Company determines to grant the Rights to Applicant, Company will forward appropriate documentation to Applicant for execution.
Source: Item 23 — RECEIPTS (FDD pages 53–145)
What This Means (2025 FDD)
According to B Bops's 2025 Franchise Disclosure Document, the document does not explicitly state whether the deposit for a franchise application bears interest. However, it does detail the conditions under which the deposit, or a portion thereof, will be returned to the applicant. Specifically, Section 7 outlines that if B Bops determines not to grant the rights to the applicant, or if either party terminates the agreement, the applicant is entitled to a refund of the deposit. This refund is calculated by subtracting the lesser of $4,500 or the actual expenses incurred by B Bops in providing services, as detailed in Section 2, from the initial deposit. These expenses include travel, lodging, living expenses, and a $100 per hour charge for office time spent reviewing or preparing information for the applicant.
The FDD specifies that B Bops will forward any refund to the applicant within ten days after the applicant returns all confidential information. Failure to return this information results in forfeiture of the entire deposit. The agreement also clarifies that neither party is obligated to grant the rights, and both have the right to terminate the agreement without cause, in which case the deposit, or a portion thereof, will be returned according to Section 7.
Prospective franchisees should note that the application agreement includes provisions for deducting expenses from the deposit, which could significantly reduce the amount returned. It is crucial to understand what constitutes 'actual expenses' and how these are documented by B Bops. Additionally, the applicant must ensure all confidential information is promptly returned to avoid forfeiting the entire deposit. Since the FDD does not address interest, it would be prudent for potential franchisees to directly inquire with B Bops about whether the deposit accrues any interest during the application process.