What is the effect of checking a Rider to the Multi-Unit Development Agreement for Specific States as an 'Applicable Rider' in the Bambu MUD Agreement?

According to the 2025 Bambu Franchise Disclosure Document, if a Rider to the Multi-Unit Development Agreement (MUD Agreement) for Specific States is marked as an 'Applicable Rider', it becomes integrated into the MUD Agreement between Bambu Franchising LLC and the franchisee. This means the terms outlined in the specific state rider will be legally binding.

Moreover, the FDD states that if any of the terms within an Applicable Rider conflict with the standard terms of the MUD Agreement, the terms specified in the Rider will take precedence. This ensures that the agreement complies with specific state laws or regulations that may differ from Bambu's standard franchise terms. For example, the California Rider to MUD Agreement defers the payment of development and initial fees for California franchisees until the unit is open, due to the Department determining that Bambu has not demonstrated adequate capitalization.

Several states have specific riders that address financial and legal considerations. The Hawaii Rider to MUD Agreement defers the Development Fee, payable on a prorata basis ($19,000 for each additional shoppe), until Bambu completes its preopening obligations. The Illinois Rider defers the Development Fee until Bambu fulfills its initial obligations and the franchisee commences business, a requirement imposed by the Illinois Attorney General's Office due to Bambu's financial condition. The Maryland Rider also defers initial franchise fees and payments until Bambu completes its pre-opening obligations, based on a financial assurance required by the Maryland Securities Commissioner. Similarly, the Virginia Rider defers the Development Fee until Bambu completes its pre-opening obligations for the franchisee's first shoppe.

These riders also include stipulations that protect the franchisee's rights under state franchise laws, preventing them from waiving claims or disclaiming reliance on statements made by Bambu. For instance, the California and Illinois Riders explicitly state that no agreement signed by the franchisee can waive claims under state franchise law or disclaim reliance on statements made by the franchisor. This ensures that franchisees retain their legal rights and protections, regardless of any conflicting terms in the standard MUD Agreement.