If a new Franchise Agreement is required for a Bambu franchise transfer, will the transferee have to pay an additional initial franchise fee?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
Execution of a Franchise Agreement (for the same type of franchise as granted by this Agreement or an equivalent type then offered as determined by Bambu) and any ancillary documents, such as the Guaranty and Assumption of Franchisee's Obligations and Nondisclosure and Noncompetition Agreement, in a form then currently offered and required by Bambu, which shall supersede this Agreement in all respects.
If a new Franchise Agreement is signed, the terms thereof may differ substantially from the terms of this Agreement; provided, however, the transferee will not be required to pay any additional initial franchise fee.
Source: Item 23 — Receipts (FDD pages 52–209)
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, if a new Franchise Agreement is required for a franchise transfer, the transferee will not be required to pay an additional initial franchise fee. However, the terms of the new Franchise Agreement may differ substantially from the original agreement.
This condition protects the incoming franchisee from having to pay the initial franchise fee again, which can be a substantial cost. However, prospective franchisees should carefully review the terms of the new Franchise Agreement to understand any changes, which Bambu states may differ substantially from the original agreement. These changes could affect various aspects of the franchise operation, such as royalty fees, marketing obligations, or operational requirements.
It is important for potential transferees to seek legal counsel to review both the existing Franchise Agreement and the proposed new agreement. This will ensure they fully understand their rights and obligations before completing the transfer. Additionally, transferees should assess whether the potential changes in the new agreement impact the financial viability and operational feasibility of the Bambu franchise.