Is the B Bops development fee refundable, and if so, under what circumstances?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
Development Fee. If you elect to purchase development rights under the multiple-unit arrangement, you must pay the Company a development fee. The amount of the development fee will vary and will be determined by multiplying $5,000 times the number of Franchises to be developed according to the development schedule. The 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 you establish all of the Franchises specified in the development schedule, the entire development fee will be applied towards payment of the initial franchise fees due to the Company. 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.
Initial Franchise Fee. The initial franchise fee payable for the first Franchise established under the multiple-unit arrangement is $30,000. The Company's opening assistance for a period of between three and five days prior to the opening of the Franchise and for a period of four to six days immediately following the opening of the Franchise (other than the Company's out-ofpocket costs for airline and hotel expenses for the people provided by the Company for the opening assistance) is provided by the Company as a part of the initial franchise fee. See Item 11 for more information on opening assistance. Each additional Franchise established under the multiple-unit arrangement requires payment of an initial franchise fee of $20,000. The initial franchise fee for each Franchise is required to be paid to the Company upon execution of the then current franchise agreement granting you the right to establish the Franchise. As noted above, $5,000 of the development fee will be applied by the Company toward the initial franchise fee payable for each Franchise established under the Development Agreement. The initial franchise fee for Franchises purchased under the multiple-unit arrangement is uniform in all cases.
Source: Item 5 — INITIAL FEES (FDD pages 12–14)
What This Means (2025 FDD)
According to B Bops's 2025 Franchise Disclosure Document, the development fee, required when purchasing multiple-unit franchise rights, is generally non-refundable. Specifically, the FDD states that the development fee is "not refundable in whole or in part under any circumstances," except as otherwise noted. The development fee is calculated by multiplying $5,000 by the number of franchises to be developed under the development schedule.
However, the initial $5,000 deposit submitted with the Application Agreement for development rights is partially refundable under certain conditions. If B Bops decides not to grant the development rights, or if either party terminates the Application Agreement before a decision is made, a portion of the deposit will be refunded after the applicant returns any confidential information. The refundable amount is the deposit 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.
This means that a prospective B Bops franchisee seeking development rights could lose a significant portion of their initial deposit, even if the application is not approved. The franchisee bears the risk of covering B Bops's expenses during the application review process, which could substantially reduce the refundable amount. The Application Agreement can be terminated by either party, which would still entitle the applicant to a refund of the deposit, calculated as described above.