How does Bambu apply payments received from a Bambu franchisee if they have past due indebtedness?

According to Bambu's 2025 Franchise Disclosure Document, Bambu has the sole discretion to apply any payments received from a franchisee towards any past due indebtedness. This includes applying payments to the royalty fee, the marketing and technology fee, purchases from Bambu or its affiliates, interest, or any other outstanding debt the franchisee owes. This applies regardless of any specific designation the franchisee might make regarding how the payment should be applied.

This policy gives Bambu significant control over how payments are allocated, potentially prioritizing the franchisor's financial interests over the franchisee's preferences. For example, even if a franchisee intends a payment to cover the current month's royalty fee, Bambu can instead apply it to an older, unpaid balance. This could lead to the franchisee incurring late fees or other penalties on the current month's obligations.

Furthermore, Bambu also has the right to offset any amounts the franchisee owes to Bambu against any amounts Bambu might owe to the franchisee. This means that if Bambu owes a franchisee a refund or credit for any reason, Bambu can reduce that amount by any outstanding debt the franchisee has with Bambu. Franchisees should be aware of this policy and maintain careful records of all payments and outstanding balances to ensure accurate accounting and avoid potential disputes with Bambu.