If a Bambu franchisee is in arrears on payments, can Bambu demand payment at the time of order?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
Bambu may require payments to be made at time of order or in cash on delivery ("COD").
If Franchisee is in arrears on any payment to Bambu, its affiliates or a third party supplier, is in default under this Agreement or is otherwise not in compliance with the terms and conditions imposed by Bambu, its affiliates or any third party supplier for the purchase of any products or items, Bambu or its affiliates may discontinue selling or permitting the purchase through the account of Bambu or its affiliates of any products or other items to Franchisee and may place the account of Franchisee on hold and cease (directly or through third party suppliers) the delivery of products already ordered and not yet paid for.
Bambu and its affiliates shall also be entitled to interest, late fees (in accordance with Section 12.5 below) and to recover their reasonable attorneys' fees from Franchisee in connection with any legal action, arbitration or other proceeding brought by them to collect amounts owed by Franchisee for purchases of products and other items from or through Bambu or its affiliates.
Source: Item 23 — Receipts (FDD pages 52–209)
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, if a franchisee is behind on payments to Bambu, its affiliates, or a third-party supplier, Bambu has the right to require payments at the time of order or even demand cash on delivery (COD). This measure is in place to protect Bambu and its affiliates from financial losses due to delinquent franchisee accounts.
Furthermore, Bambu can discontinue selling or permitting purchases through the franchisee's account, place the account on hold, and cease delivery of products already ordered but not yet paid for. This can significantly disrupt the franchisee's operations, potentially leading to loss of revenue and customer dissatisfaction. The franchisee is also responsible for interest, late fees, and reasonable attorney's fees incurred by Bambu in any legal actions to collect outstanding amounts.
This policy highlights the importance of maintaining good financial standing with Bambu and its suppliers. Franchisees should ensure timely payments to avoid these penalties and disruptions to their business. It is also essential for prospective franchisees to understand these terms and conditions before entering into a franchise agreement with Bambu, as these measures can have a substantial impact on their business operations and profitability.