According to the Bambu FDD, when are the initial fees payable to Bambu?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
Item 5 of the Disclosure Document is amended to state that the payment of the initial fees payable to us and any of our affiliates is deferred until all of our initial obligations under the Franchise Agreement have been fulfilled by us and you have commenced doing business pursuant to the Franchise Agreement. In addition, all development fees by area developers shall be deferred until we have fulfilled all of our initial obligations to you under the Franchise Agreement for your first Bambū shoppe developed under the development agreement and you have commenced business of that first Bambū shoppe. The Illinois Attorney General's Office imposed this deferral requirement due to our financial condition.
Source: Item 23 — Receipts (FDD pages 52–209)
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, the payment of initial fees to Bambu and its affiliates is deferred until Bambu has fulfilled all its initial obligations under the Franchise Agreement, and the franchisee has commenced business operations. This deferral also applies to development fees for area developers, where payment is deferred until Bambu fulfills its obligations under the Franchise Agreement for the first Bambu shop developed under the development agreement, and the franchisee has started business operations at that first shop.
For franchisees in Illinois, this deferral requirement was imposed by the Illinois Attorney General's Office due to Bambu's financial condition. This means that franchisees in Illinois will not have to pay the initial franchise fee until Bambu has met its initial obligations, providing some financial relief and reducing the upfront risk for new franchisees in that state.
For prospective franchisees outside of Illinois, it is important to confirm whether this deferral policy applies in their specific state or if other payment terms are in effect. Understanding the timing of initial fee payments is crucial for managing startup costs and cash flow when opening a Bambu franchise.