If the B Bops agreement is terminated without cause, what happens to the deposit?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
THE PARTIES HERETO ACKNOWLEDGE THAT COMPANY AND APPLICANT EACH HAVE THE RIGHT TO TERMINATE THIS AGREEMENT, WITHOUT CAUSE, AT ANY TIME BY WRITTEN NOTICE TO THE OTHER, IN WHICH CASE, THE DEPOSIT, OR A PORTION THEREOF, SHALL BE RETURNED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 7 HEREOF.
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.
Source: Item 23 — RECEIPTS (FDD pages 53–145)
What This Means (2025 FDD)
According to B Bops's 2025 Franchise Disclosure Document, if either the applicant or B Bops terminates the Application Agreement without cause, the applicant is entitled to a refund of the deposit, but this refund is subject to certain deductions. Specifically, the refund will be the deposit amount minus the lesser of $4,500 or the actual expenses B Bops incurred while providing services outlined in Section 2 of the agreement. These actual expenses include travel, lodging, living expenses of B Bops personnel, out-of-pocket expenses, and a charge of $100 per hour for office time spent reviewing the applicant's information or preparing information for the applicant.
To receive the refund, the applicant must return all confidential information to B Bops. Failure to do so results in the forfeiture of the entire deposit. B Bops is obligated to forward any refund to the applicant within ten days after receiving all confidential information.
This arrangement means that a prospective B Bops franchisee may not receive the entire deposit back if the agreement is terminated, even without cause. The franchisee bears the risk of covering B Bops's expenses up to $4,500. It is important for the applicant to understand what services are included in Section 2 of the agreement and to monitor the expenses incurred by B Bops to ensure accurate deductions from the deposit. The applicant should also promptly return all confidential information to avoid forfeiting the entire deposit.