Okay, on the last row, knit 3, then k2 more for the first BO stitch. BO 12, leaving 3 sts at the end. Fasten the last stitch of your BO like usual (pull the tail through or whatever. Then take the needle out and let the first 3 and last 3 sts drop, unravel all the way to the CO. This forms a loopy fringe.