Can a Bambu franchisee set off amounts owed to Bambu against monies owed to the franchisee?

According to Bambu's 2025 Franchise Disclosure Document, Bambu franchisees acknowledge that Bambu has the right to set off any amounts the franchisee may owe to Bambu against any amounts Bambu might owe to the franchisee. This means that if a franchisee owes Bambu money for any reason (such as unpaid royalty fees or purchases), Bambu can deduct that amount from any payments it owes to the franchisee.

This clause is significant for prospective franchisees as it gives Bambu a financial advantage. If Bambu owes a franchisee money, the franchisee cannot demand immediate payment if they also owe Bambu money. Bambu can simply reduce the amount it owes by the amount the franchisee owes.

Franchisees should be aware of this right of set-off and ensure they understand the circumstances under which Bambu might owe them money, as well as the potential impact on their cash flow. It is a fairly standard clause in franchise agreements, but its implications should be carefully considered. Franchisees should maintain meticulous records of all transactions with Bambu to ensure accurate accounting and avoid disputes over amounts owed.