Must a Bambu franchisee reimburse Bambu for the actual cost of any testing and the reasonable cost of investigation when proposing a new supplier?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
y 15 percent to 20 percent of the total cost of operating a Bambū shoppe after that time
If you want to purchase or use any inventory, products, equipment, supplies, materials, services or programs we have not approved, or purchase or lease these items from a supplier who we have not approved, you must notify us in writing and obtain our approval in advance. The notification should include sufficient specifications, photographs, drawings and other information and samples to determine whether those items or those suppliers meet our specifications. You must pay us a fee of $150 per hour per person in our testing and investigation, and reimburse us for the actual cost of any testing and the reasonable cost of investigation, to determine whether those items or suppliers meet our specifications. We will notify you of our decision within 30 days of receipt of your written request. We may reject a proposed supplier on any basis in our discretion, including for purposes of protecting our trade secrets from third parties or on the basis of the terms offered to us or our franchisees from the proposed supplier compared to any current designated or approved supplier. We do not have written criteria for supplier approval, and therefore such criteria are not provided to our franchisees. If we establish written criteria, we reserve the right to change any criteria regarding any approved supplier or any inventory, equipment, supplies, or services used, offered for sale or leased by franchise
Source: Item 8 — Restrictions on Sources of Products and Services (FDD pages 22–26)
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, if a franchisee wants to purchase or use inventory, products, equipment, supplies, materials, services, or programs that Bambu has not already approved, they must first seek approval from Bambu. This also applies to purchasing or leasing from a supplier that Bambu has not approved. The franchisee must notify Bambu in writing with sufficient details to allow Bambu to assess whether the items or suppliers meet their standards.
To evaluate the proposed new items or suppliers, Bambu charges a fee of $150 per hour per person for their testing and investigation. In addition to this hourly fee, the franchisee is responsible for reimbursing Bambu for the actual cost of any testing and the reasonable cost of the investigation itself. Bambu will then notify the franchisee of their decision within 30 days of receiving the written request.
Bambu retains the discretion to reject a proposed supplier for any reason. This includes protecting their trade secrets or considering the terms offered by the proposed supplier compared to current approved suppliers. It is important to note that Bambu does not have written criteria for supplier approval, and these criteria are not provided to franchisees. However, Bambu reserves the right to establish and change criteria for approved suppliers and items, requiring franchisees to comply with such changes within 10 days of written notice.