For an area developer of a Bambu franchise in Illinois, when are development fees deferred until?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
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, for area developers in Illinois, the payment of development fees is deferred until Bambu has fulfilled all of its initial obligations to the area developer under the Franchise Agreement for the first Bambu shop developed under the development agreement. Additionally, the area developer must have commenced business operations at that first Bambu shop. This deferral requirement was imposed by the Illinois Attorney General's Office due to Bambu's financial condition.
This deferral of fees is a significant benefit for prospective area developers in Illinois. It reduces the initial financial burden, allowing the developer to focus on establishing the first location before paying the development fees. This can be particularly helpful in managing cash flow during the initial stages of the franchise.
It is important to note that this deferral is specific to Illinois and is a result of the Illinois Attorney General's Office's intervention due to Bambu's financial condition. Franchisees in other states may not have the same deferral benefits. Additionally, the deferral is only until the first shop is operational; fees for subsequent shops are not deferred in the same manner.