How much did Bambu's predecessors reimburse Bambu for the amounts paid in the Virginia and Maryland cases?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
Proceedings Against Only Our Predecessors
- Commonwealth of Virginia, ex rel., State Corporation Commission v. Bambu IP, LLC, Bambu Desserts & Drinks, Inc. and Kimhong Thi Nguyen (also known as Kelly Nguyen), Case no. SEC-2015-00028. In 2015, the Virginia State Corporation Commission opened an investigation into a complaint against our predecessors BIP and BDDI, and a principal of the predecessors, made by a licensee in Virginia who purchased a license from the predecessors in 2013. Without admitting or denying the Commission's allegations, the predecessors signed a Settlement Order with the Commission effective August 11, 2016, concluding the Commission's investigation into whether a violation of Section 13.1-560 and Section 13.1-563(4) of the Virginia Retail Franchising Act had occurred. Under the Settlement Order, we paid on behalf of the predecessors $80,000 in restitution to the Virginia licensee and $4,500 to the Commission for penalties and investigation costs. A Final Order was entered on October 25, 2016, dismissing the case. Our predecessors have reimbursed us for one-half of these amounts.
- Administrative Proceeding Before the Securities Commissioner of Maryland In the Matter of: Bambu Desserts and Drinks, Inc., Case no. 2015-0307. In 2015, the Securities Division of the Office of the Attorney General of Maryland ("Division") opened an investigation into the sale of an option by BDDI, our predecessor, to the same Virginia licensee described in paragraph 1 above for a location that may have been in Maryland. Without admitting or denying the Division's allegations, the predecessor signed a Consent Order with the Division effective August 15, 2016. Under the Consent Order, we paid on behalf of the predecessor $5,000 in restitution to the Virginia licensee. The $5,000 was included in the amount paid under the Virginia Settlement Order described in paragraph 1 above. Our predecessors have reimbursed us for one-half of these amounts.
Other than these actions, no litigation is required to be disclosed in this Item.
Source: Item 3 — Litigation (FDD pages 12–13)
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, the company's predecessors reimbursed Bambu for one-half of the amounts paid in both the Virginia and Maryland cases. In the Virginia case, Bambu paid $80,000 in restitution to a licensee and $4,500 to the Virginia State Corporation Commission for penalties and investigation costs on behalf of its predecessors. In the Maryland case, Bambu paid $5,000 in restitution to the same Virginia licensee.
Since the predecessors reimbursed Bambu for one-half of the total amount, they reimbursed Bambu for one-half of the combined payments made in both cases. The total amount paid by Bambu was $89,500 ($80,000 + $4,500 + $5,000). Therefore, the reimbursement from Bambu's predecessors amounted to $44,750, which is half of $89,500.
This information is relevant to potential franchisees as it provides insight into Bambu's handling of legal issues involving its predecessors. It shows that while Bambu covered the initial costs, it received partial reimbursement from the previous entities. This could be seen as a positive sign, indicating that Bambu is not solely bearing the financial burden of past legal matters. However, franchisees should still conduct their own due diligence to understand the full scope of any potential liabilities or risks associated with the franchise.