What is the amount of the deposit required when signing the Creative World School agreement?
Creative_World_School Franchise · 2025 FDDAnswer from 2025 FDD Document
a franchise to operate a School in a defined geographic area designated by us (the "Territory"). To determine whether to grant you a Franchise, we must evaluate your credentials and determine the feasibility of adding School(s) in the Territory. We incur various expenses in making those evaluations and determinations.
Accordingly, the parties agree as follows:
OPERATIVE TERMS
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- Deposit: Contemporaneously with signing this Agreement, you have deposited $5,000 (the "Deposit") with us. If we grant a Franchise to you, this Deposit will be credited toward the initial franchise fee payable in accordance with the Franchise Agreement. The Deposit will not bear interest. We will not establish a separate account for the Deposit. You recognize that we incur significant expenses in evaluating your qualifications and evaluating sites for a School. Once you and we have approved a site for a School that we have determined can be acquired on reasonably acceptable terms by lease or purchase, then the Deposit is not refundable under any circumstances. We will only refund a portion of the Deposit to you if: (a) you and we both do not sign a Franchise Agreement; and (b) we have not approved a proposed site for a School within 180 days of signing this Agreement. Solely in that event, we will refund you the Deposit less the greater of (i) $3,500;
Source: Item 23 — RECEIPTS (FDD pages 80–247)
What This Means (2025 FDD)
According to the 2025 Creative World School Franchise Disclosure Document, a $5,000 deposit is required when signing the franchise agreement. This deposit is credited towards the initial franchise fee if Creative World School grants the franchise. The deposit does not accrue any interest, and Creative World School will not place it in a separate account.
Creative World School incurs expenses when evaluating a prospective franchisee's qualifications and potential sites. Once both parties approve a site that can be acquired under acceptable terms, the $5,000 deposit becomes non-refundable. This means that if the franchisee later decides not to proceed, they will forfeit the deposit.
However, a refund of a portion of the deposit is possible under specific conditions. If a Franchise Agreement is not signed by both the franchisee and Creative World School, and a site has not been approved within 180 days of signing the agreement, Creative World School will refund the deposit, less the greater of $3,500 or the franchisor's out-of-pocket expenses. These expenses may include charges from an architect for preliminary site plans. This clause protects Creative World School from incurring losses due to extensive preliminary work if a franchisee does not follow through with the agreement.