What collateral is used for the note payable with a finance company for Bambu?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
cluding the interest component are as follows:
| 2025 | $ 15,028 |
|---|
NOTE4-NOTESPAYABLE
Notes payable consist of the following at December 31,
| 2024 | 2023 | |
|---|---|---|
| Note payable with a finance company. Face Amount | $ 168,685 |
Source: Item 23 — Receipts (FDD pages 52–209)
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, a note payable with a finance company, with a face amount of $183,258 and an interest rate of 19.99% per year, is collateralized by the company's assets and the personal guarantee of the managing member of the company. The payment is structured in 84 installments of $4,068. The face amount for 2024 was $168,685.
This means that Bambu has secured a loan using its business assets as collateral, and the managing member has provided a personal guarantee. If Bambu defaults on this loan, the finance company has a legal claim on the company's assets to recover the outstanding debt. Additionally, the managing member's personal assets could be at risk due to the personal guarantee.
For a prospective franchisee, this information provides insight into the financial obligations and liabilities of Bambu. It is important to understand the implications of the company's debt structure, as it could affect the franchisor's ability to support its franchisees. Additionally, the high interest rate of 19.99% suggests that Bambu may have had difficulty obtaining financing from traditional sources, which could be a red flag.
It is common for franchisors to have debts and loans, but the terms and collateral can vary significantly. Prospective franchisees should carefully review the franchisor's financial statements and consult with a financial advisor to assess the potential risks and rewards of investing in the franchise.