What are the implications of Bambu not offering financing in Item 10 for a franchisee's ability to meet the initial franchise fee payment schedule outlined in Item 5?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
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INITIAL FEES
Franchise Agreement
The initial franchise fee ("Initial Franchise Fee") is $49,000. The Initial Franchise Fee is due in four installments: (1) a non-refundable payment of $15,000 due when you sign the Franchise Agreement for your Bambū shoppe; (2) a non-refundable payment of $10,000 when your lease for your Bambū shoppe is presented to us for review; (3) a non-refundable payment of $15,000 when you take possession of the leased premises, and (4) a non-refundable payment of $9,000 when your opening training program is scheduled. We may reduce or waive the Initial Franchise Fee for franchisees in non-traditional locations or for a franchisee who obtained a suitable location prior to signing the Franchise Agreement, in our discretion. We will discount your initial fee for a second or subsequent shoppe if you qualify to open more than one shoppe at a time pursuant to a MUD Agreement as described below.
Multi-Unit Development Agreement
If you enter into a MUD Agreement, you will sign that agreement together with the Franchise Agreement for your first Bambū shoppe. You will pay the Initial Franchise Fee for the first Bambū shoppe in accordance with the terms of the Franchise Agreement, as described above, and under the MUD Agreement, you will also pay a development fee equal to $19,000 times the number of additional shoppes to be developed under the MUD Agreement (the "Development Fee").
The Initial Franchise Fee for the second and each subsequent Bambū shoppe to be opened under the MUD Agreement will be $39,000. The $19,000 portion of the Development Fee paid for each of the second and subsequent Bambū shoppes to be developed under the MUD Agreement is credited toward the Initial
Franchise Fee to be paid for that additional shoppe. The balance of the Initial Franchise Fee ($20,000) is due upon execution of the Franchise Agreement for that shoppe, but no later than the deadline set forth in the MUD Agreement for signing the Franchise Agreement related to that shoppe.
The Initial Franchise Fee, Development Fee and other expenses set forth in this Item 5, once paid, are nonrefundable. Except as may be described in this Item 5, all franchisees currently acquiring a franchise pay the same franchise fees.
ITEM 6 OTHER FEES
| Type of Fee1 | Amount | Due Date | Remarks |
|---|---|---|---|
| also pay us the monthly | |||
| amount of the Royalty | |||
| Fee during the closure | |||
| period. | |||
| New Equipment, Upgrading, and Remodeling Expenses4, 5 | Will vary depending on the items that are upgraded or remodeled. | As required by us | Payable if we require new equipment, upgrades, or remodeling of the premises, the furnishings or the equipment used in the shoppe. |
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, because Bambu does not offer financing, franchisees must secure funding through their own means to meet the initial franchise fee payment schedule. The initial franchise fee is $49,000, payable in four installments: $15,000 upon signing the Franchise Agreement, $10,000 when the lease is submitted for review, $15,000 upon taking possession of the leased premises, and $9,000 when the opening training program is scheduled.
This lack of direct financing from Bambu means prospective franchisees need to have sufficient capital or secure external financing (e.g., loans from banks, credit unions, or private investors) to cover these initial fees. Franchisees should factor in the time it takes to secure financing into their planning, as delays in obtaining funds could impact their ability to meet the payment deadlines outlined in the franchise agreement. Missing these deadlines could potentially lead to a breach of contract.
For franchisees considering a Multi-Unit Development (MUD) Agreement, the financial obligations are even more significant. In addition to the initial franchise fee for the first Bambu shoppe, a development fee of $19,000 per additional shoppe is required. The initial franchise fee for subsequent shoppes under the MUD agreement is $39,000, but $19,000 of the development fee is credited towards this amount, leaving a balance of $20,000 due upon execution of each subsequent Franchise Agreement. Again, without franchisor financing, franchisees must be prepared to manage these substantial upfront costs through their own financial resources.
However, it's important to note that in certain states like Illinois, the payment of initial fees may be deferred until Bambu has fulfilled its initial obligations under the Franchise Agreement and the franchisee has commenced business. Similarly, in Virginia and Washington, payment of the initial franchise fee is deferred until Bambu has completed its pre-opening obligations. This deferral, imposed by state regulatory bodies due to Bambu's financial condition, provides some financial relief to franchisees during the initial stages, but franchisees will still need a plan to pay the fees once they become due.