Is the $5,000 deposit for a Creative World School franchise refundable?
Creative_World_School Franchise · 2025 FDDAnswer from 2025 FDD Document
otes**
- (1) All fees payable to us or our affiliate are non-refundable, except for the Deposit. At our discretion, we may require a $5,000 Deposit when you apply to be a Creative World School franchisee. The Deposit will be credited toward the amount of the Initial Franchise Fee when you sign the Franchise Agreement. If you do not sign a Franchise Agreement within 180 days after signing the Site Assessment Deposit Agreement, then we will refund the Deposit less the greater of: (i) $2,500; or (ii) our out-of-pocket expenses for time and effort expended in reliance upon your application.
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 18–21)
What This Means (2025 FDD)
According to the 2025 Creative World School Franchise Disclosure Document, the $5,000 deposit is potentially refundable under specific conditions. Creative World School may require a $5,000 deposit when an applicant applies to become a franchisee. This deposit is credited towards the initial franchise fee when the Franchise Agreement is signed. The initial franchise fee ranges from $75,000 to $80,000. If the applicant is a United States armed services veteran who presents satisfactory evidence of an honorable discharge (such as a DD214), the initial fee for their school is reduced to $75,000.
However, the refundability of the deposit is subject to certain conditions. If a Franchise Agreement is not signed within 180 days after signing the Site Assessment Deposit Agreement, Creative World School will refund the deposit, but will deduct the greater of (i) $2,500; or (ii) their out-of-pocket expenses for time and effort expended in reliance upon the application.
Importantly, once Creative World School and the franchisee have approved a site for the school, the $5,000 deposit becomes non-refundable. This condition is critical for prospective franchisees to consider, as the deposit is at risk once a site is approved, regardless of whether a Franchise Agreement is ultimately signed.