For California franchisees with a development agreement with Bambu, when is the payment of development and initial fees due for a specific unit?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
The following shall be added at the end of Section 2.1:
The Department has determined that we, the franchisor, have not demonstrated we are adequately capitalized and/or that we must rely on franchise fees to fund our operations. The Commissioner has imposed a fee deferral condition, which requires that we defer the collection of all initial fees from California franchisees until we have completed all of our pre-opening obligations and you are open for business. For California franchisees who sign a MUD Agreement, the payment of the development and initial fees attributable to a specific unit in your development schedule is deferred until that unit is open
Source: Item 23 — Receipts (FDD pages 52–209)
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, for California franchisees who sign a MUD (Multi-Unit Development) Agreement, the payment of development and initial fees attributable to a specific unit in their development schedule is deferred until that specific unit is open for business. This is due to a fee deferral condition imposed by the Department, which determined that Bambu had not demonstrated adequate capitalization and/or that it relies on franchise fees to fund its operations.
This deferral is outlined in the California Rider to the MUD Agreement, which adds a clause to Section 2.1 regarding fee payments. This means that a new Bambu franchisee in California with a development agreement will not have to pay the development and initial franchise fees for each unit until it is ready to open.
This arrangement is beneficial for California franchisees as it reduces the upfront financial burden and aligns the fee payment with the commencement of business operations for each unit. It also suggests that Bambu's financial stability may be a concern, as the California Department has imposed this condition to protect franchisees. Prospective franchisees should carefully consider this deferral condition and its implications for Bambu's financial health and their own investment.