What expenses can B Bops deduct from the deposit refund?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
In the event the Company decides to grant you a Franchise, the deposit will be applied toward payment of the initial franchise fee. If, on the other hand, the Company determines that a Franchise will not be granted, or if either party terminates the Application Agreement before a decision on granting a Franchise has been made, a portion of the deposit will be refunded to you
once you have returned any confidential information which may have been provided to you by the Company. The refund will be equal to the amount of 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 you 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, the company may deduct certain expenses from the $5,000 deposit refund if the franchise is not granted or the Application Agreement is terminated. Specifically, B Bops will refund the deposit amount minus the lesser of two amounts: $4,500, or the actual expenses incurred by B Bops while providing services under the Application Agreement. These actual expenses include travel and lodging, as well as a $100 hourly fee for office time.
For a prospective B Bops franchisee, this means that while the initial deposit is $5,000, the amount actually refunded could be significantly less, depending on the expenses B Bops incurs while assessing the application. The franchisee risks losing up to $4,500 of the deposit. This is a standard practice in franchising, where franchisors incur costs evaluating potential franchisees and sites.
It is important for potential franchisees to understand what services are provided by B Bops during the application process, as these services will determine the expenses that may be deducted from the deposit. Franchisees should also be aware that the Application Agreement can be terminated by either party, but expenses may still be deducted from the deposit. Franchisees should carefully consider these terms before submitting the Application Agreement and deposit.