Does Bambu's assessment of late fees constitute an agreement to accept late payments from a Bambu franchisee?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
In the event that Franchisee fails to have sufficient funds in its account or otherwise fails to pay the Marketing and Technology Fee, Royalty Fee, or other payments due to Bambu as of the date due, Franchisee shall owe in addition to the Marketing and Technology Fee, Royalty Fee, or other amounts due, interest at the highest applicable legal rate for open account credit, not to exceed 1½ percent per month.
Franchisee acknowledges that this Section 12.5 shall not constitute Bambu's or its affiliates' agreement to accept such payments after they are due or a commitment to extend credit to or otherwise finance operations of the shoppe.
Source: Item 23 — Receipts (FDD pages 52–209)
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, the assessment of late fees does not constitute an agreement to accept late payments. The FDD states that if a franchisee fails to pay the Marketing and Technology Fee, Royalty Fee, or other payments by the due date, they will owe interest at the highest applicable legal rate for open account credit, not to exceed 1½ percent per month, in addition to the original amount due.
However, the franchise agreement explicitly states that assessing these late fees and interest does not mean that Bambu agrees to accept these payments after they are due. It also clarifies that it is not a commitment from Bambu to extend credit or finance the operations of the franchise.
This clause protects Bambu by ensuring that while they may charge interest on late payments, they are not obligated to accept them, nor are they providing any form of credit to the franchisee. This is a fairly standard practice in franchising, allowing the franchisor to maintain control over payment schedules and avoid being seen as a lender.