What happens to the deposit if either party terminates the Application Agreement for a B Bops franchise?
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, if either party terminates the Application Agreement before a decision is made on granting a franchise, a portion of the $5,000 deposit will be refunded to the applicant. However, this refund is contingent upon the applicant returning any confidential information provided by B Bops.
The amount refunded will be the initial $5,000 deposit minus the lesser of two amounts: $4,500, or the actual expenses incurred by B Bops in providing services under the Application Agreement. These expenses can include travel, lodging, and a $100 hourly fee for office time spent by B Bops.
This means that the franchisee could potentially receive a refund anywhere between $500 and $5,000, depending on the expenses B Bops incurred. It is important for prospective franchisees to understand that the refund may be significantly reduced by these expenses, even if the application is terminated early in the process. This policy is fairly standard in franchising, as it compensates the franchisor for the time and resources spent evaluating the applicant and providing initial support.