Does the Bambu franchisee have to pay taxes or withholdings on payments made to Bambu?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
- 20.2 Payment of Third Party Obligations.
Bambu shall have no liability for Franchisee's obligations to pay any third parties, including without limitation, any product vendors, or any sales, use, service, occupation, excise, gross receipts, income, property or other tax levied upon Franchisee, Franchisee's property, the Bambū shoppe or upon Bambu in connection with the sales made or business conducted by Franchisee (except any taxes Bambu is required by law to collect from Franchisee with respect to purchases from Bambu).
- 24.20 Manner of Payment.
All references in the Agreement to the term "Dollars" or the symbol "$" refers to United States Dollars, and all payments made to Bambu, unless otherwise noted, must be paid in United States Dollars net of any taxes or withholdings.
The exchange rate for calculating payments due will be the exchange rate published in The Wall Street Journal the day the payment is due.
If, for any reason whatsoever, a payment that is due to Bambu under this Agreement is not paid on the date that such payment is due, the exchange rate to be used shall be either the exchange rate published on the due date or the exchange rate published on the date that the payment is actually made, whichever results in a greater amount to Bambu.
If The Wall Street Journal is not published on the date of conversion, the applicable exchange rate will be that rate published in The Wall Street Journal on the nearest date of publication prior to the date of conversion or by a successor or equivalent publication to be designated by Bambu in the event The Wall Street Journal ceases to be published or ceases to publish the applicable exchange rates.
Bambu may designate and change payment instructions at any time on prior written notice to Franchisee.
Franchisee shall be solely responsible for the payment of any costs and charges incurred in connection with the transfer and exchange of currency over and above any fees due or paid.
Source: Item 23 — Receipts (FDD pages 52–209)
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, franchisees are generally responsible for their own taxes. Specifically, Bambu franchisees are liable for sales, use, service, occupation, excise, gross receipts, income, property, or other taxes levied upon the franchisee, their property, or the Bambu shop. The only exception is for taxes that Bambu is legally obligated to collect from the franchisee related to purchases from Bambu.
Furthermore, the FDD states that all payments made to Bambu must be in United States Dollars, net of any taxes or withholdings. This means that when a franchisee makes a payment to Bambu, the franchisee is responsible for ensuring that the full amount due is paid, without any deductions for taxes or other withholdings. The franchisee bears the responsibility for any costs associated with currency transfer and exchange to ensure Bambu receives the full payment in USD.
In practical terms, this means a prospective Bambu franchisee needs to factor in tax obligations as a separate expense, distinct from the fees and payments they make to the franchisor. They should consult with a tax advisor to understand their specific tax liabilities related to operating the franchise. Franchisees outside the United States must ensure payments are made in U.S. dollars and account for any currency exchange costs.