What is the dependency for Bambu to collect initial fees from a franchisee in Washington?

According to Bambu's 2025 Franchise Disclosure Document, the collection of initial fees from a franchisee in Washington is dependent on Bambu fulfilling its pre-opening obligations and the opening of the franchisee's Bambū shoppe. The Securities Administrator of the State of Washington has determined that Bambu's financial condition necessitates this deferral to ensure Bambu can meet its obligations to the franchisee during the establishment and opening phase.

This requirement is outlined in the Washington Rider to the Franchise Agreement, which adds a statement to Section 4.1 specifying that Bambu must defer the payment of all initial fees until it has completed its initial obligations under the Franchise Agreement and the franchisee's Bambū shoppe is open. This condition is in place due to concerns raised by the Washington Securities Administrator regarding Bambu's financial capability to support franchisees during the initial setup.

For a prospective franchisee in Washington, this means they will not be required to pay the initial franchise fee until Bambu has fulfilled its obligations, such as providing training, site selection assistance, and other pre-opening support as outlined in the Franchise Agreement. This arrangement reduces the financial risk for the franchisee during the initial stages of the business, as they are not paying the franchise fee until the store is ready to open and generate revenue.

This type of arrangement, where initial fees are deferred until certain conditions are met, is not typical in the franchise industry. Usually, initial franchise fees are paid upfront upon signing the franchise agreement. The Washington Rider provides an added layer of protection for franchisees in that state, ensuring that Bambu is committed to supporting the franchisee through the opening process before receiving the initial franchise fee.