What happens to the B Bops deposit if the applicant is not granted the Rights?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
l 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
Source: Item 23 — RECEIPTS (FDD pages 53–145)
What This Means (2025 FDD)
According to B Bops's 2025 Franchise Disclosure Document, if B Bops determines that the Rights will not be granted to the applicant, the applicant is entitled to a refund of the deposit (upon the return of all confidential information). The refund amount will be the deposit amount, less the lesser of $4,500 or the actual expenses incurred by B Bops in providing services as identified in Section 2 of the agreement. These actual expenses include travel, lodging, living expenses of B Bops personnel, out-of-pocket expenses, and a $100 per hour charge for office time spent reviewing or preparing information for the applicant. B Bops will forward any refund to the applicant within ten days after the applicant returns all confidential information to B Bops. Failure to return any confidential information will result in forfeiture of the entire deposit. The initial deposit is $5,000.
This means that a potential B Bops franchisee may not receive the entire $5,000 deposit back if B Bops denies the application. The amount retained by B Bops could cover expenses incurred during the application review process. It is important for the applicant to understand what services are included in Section 2 to estimate potential deductions.
It is also important to promptly return all confidential information if the application is denied to avoid forfeiting the entire deposit. This policy is fairly standard in franchising, as it protects the franchisor's proprietary information while allowing them to recoup reasonable expenses incurred during the application process.