If a B Bops franchisee terminates the Application Agreement, what amount of the deposit are they entitled to?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Application Agreement | Summary | |-----------------------------------------------|-------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | A. Term of Agreement | Section 3 | The Company will inform you within 90 days from the effective date of the Application Agreement whether development rights or franchise rights will be granted. | | B. Renewal or Extension of | None | Not applicable. | | the Term | | | | C. Requirements for you to | None | Not applicable. | | Renew or Extend | | | 1 To the extent that Minnesota Statutes Section 80C.14 is applicable to the Development Agreement, the Company will comply with Section 80C.14, subdivisions 3, 4 and 5 which require, except in certain specified cases, that you be given ninety (90) days notice of termination (with sixty (60) days to cure) and one hundred eighty days (180) days notice for non-renewal.
2 Pursuant to Minnesota Statutes Section 80C.21 and Minnesota Rule Part 2860.4400J, these provisions shall not in any way abrogate or reduce any of your rights as provided for in Minnesota Statutes, Chapter 80C.
| D. Termination by You | Sections 4 and 8 | You may terminate at anytime without cause. Upon termination you will be entitled to the amount of the deposit ($5,000) minus the lesser of (i) $4,500 or (ii) the actual expenses incurred by the Company, as provided in the Application Agreement. If the Company determines to grant you development rights or franchise rights (whichever is applicable) and you do not execute and deliver the appropriate documentation and pay the initial franchise fee or development fee, whichever is applicable, within 15 days after receipt of the documents the Application Agreement shall become |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 40–49)
What This Means (2025 FDD)
According to B Bops's 2025 Franchise Disclosure Document, a franchisee who terminates the Application Agreement at any time without cause is entitled to a refund of their deposit. The deposit amount is $5,000, but the refund will be reduced by either $4,500 or the actual expenses B Bops incurred, whichever is less.
In practical terms, this means the franchisee will receive a refund of at least $500, assuming B Bops's expenses are minimal. However, if B Bops's actual expenses related to the application process are higher than $4,500, the franchisee's refund will be less than $500.
It's important for prospective B Bops franchisees to understand that the Application Agreement deposit is not fully refundable, and the amount they receive back will depend on B Bops's expenses. Franchisees should inquire about what these expenses typically include to better estimate their potential refund upon termination.