Upon what event must the B Bops development fee be paid?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
Development Fee. If you elect to purchase development rights under the multiple-unit arrangement, you must pay the Company a development fee. The amount of the development fee will vary and will be determined by multiplying $5,000 times the number of Franchises to be developed according to the development schedule. The sum of $5,000 of the development fee will be allocated towards satisfaction of the initial franchise fee payable for each Franchise established under the Development Agreement. If you establish all of the Franchises specified in the development schedule, the entire development fee will be applied towards payment of the initial franchise fees due to the Company. If you fail to comply with the development schedule (or otherwise default under the Development Agreement) and the Development Agreement is terminated, the Company will be entitled to retain that portion of the development fee that has not been applied towards payment of initial franchise fees prior to such termination. The development fee must be paid upon execution of the Development Agreement. You will receive a credit of $5,000 toward payment of such fee from the deposit paid upon execution of the Application Agreement (see below). Except as noted below, the development fee is not refundable in whole or in part under any circumstances.
Source: Item 5 — INITIAL FEES (FDD pages 12–14)
What This Means (2025 FDD)
According to B Bops's 2025 Franchise Disclosure Document, the development fee is due upon the execution of the Development Agreement. This fee is applicable if a franchisee elects to purchase development rights under a multiple-unit arrangement. The development fee is calculated by multiplying $5,000 by the number of franchises to be developed according to the development schedule.
For a prospective B Bops franchisee considering a multiple-unit arrangement, this means that they will need to pay the development fee upfront when signing the Development Agreement. A portion of this fee, specifically $5,000 per franchise, will be credited towards the initial franchise fee for each franchise established under the agreement. This initial deposit of $5,000 is paid when the franchisee submits the Application Agreement.
However, if the franchisee fails to meet the development schedule or defaults on the Development Agreement, B Bops has the right to retain the portion of the development fee that hasn't been applied to initial franchise fees before the termination. This condition highlights the importance of adhering to the development schedule outlined in the Development Agreement. The development fee is generally non-refundable, so understanding the terms and conditions is crucial for any potential B Bops franchisee.