What happens if a Franchisee is due a credit after the January 15th reconciliation with Bambu?

According to Bambu's 2025 Franchise Disclosure Document, if a franchisee is due a credit after the January 15th reconciliation, Bambu will apply the overpayments to future monthly Royalty Fees until the overpayment is fully applied. This reconciliation process occurs annually, where Bambu reconciles the Royalty Fee due for the prior calendar year based on the franchisee's actual Net Revenues generated by their Bambū shoppe. This is minus all Royalty Fee amounts previously paid related to the franchisee's prior year operations.

This means that if a Bambu franchisee overpays their royalty fees during the year, they will not receive a direct refund. Instead, the overpayment will be used as a credit towards future monthly royalty fee obligations. This could impact a franchisee's cash flow management, as they will need to account for this credit when budgeting for future royalty payments.

For a prospective Bambu franchisee, it's important to understand this policy and factor it into their financial planning. While receiving a credit is beneficial, it may not be as immediately helpful as receiving a direct refund, especially if the franchisee is facing short-term cash flow challenges. Franchisees should maintain accurate records of their net revenues and royalty fee payments to ensure the reconciliation process is accurate and to anticipate how the credit will affect their future payments.