For a Bambu Multi-Unit Development Agreement in Washington, how is the franchise fee released?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
eable.
Transfer fees are collectable to the extent that they reflect the franchisor's reasonable estimated or actual costs in effecting a transfer.
Pursuant to RCW 49.62.020, a noncompetition covenant is void and unenforceable against an employee, including an employee of a franchisee, unless the employee's earnings from the party seeking enforcement, when annualized, exceed $100,000 per year (an amount that will be adjusted annually for inflation). In addition, a noncompetition covenant is void and unenforceable against an independent contractor of a franchisee under RCW 49.62.030 unless the independent contractor's earnings from the party seeking enforcement, when annualized, exceed $250,000 per year (an amount that will be adjusted annually for inflation). As a result, any provisions contained in the franchise agreement or elsewhere that conflict with these limitations are void and unenforceable in Washington.
RCW 49.62.060 prohibits a franchisor from restricting, restraining, or prohibiting a franchisee from (i) soliciting or hiring any employee of a franchisee of the same franchisor or (ii) soliciting or hiring any employee of the franchisor. As a result, any such provisions contained in the franchise agreement or elsewhere are void and unenforceable in Washington.
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- No statement, questionnaire, or acknowledgment signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any statement made by any franchisor, franchise seller, or
Source: Item 23 — Receipts (FDD pages 52–209)
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, the standard procedure for franchise fee release is modified by a Washington state-specific addendum. Typically, Bambu earns the development fee upon receipt, which is calculated as $19,000 multiplied by the number of additional shoppes to be developed beyond the first. For each subsequent shoppe, $19,000 of the development fee is credited towards the initial franchise fee of $39,000, leaving a balance of $20,000 due upon execution of the Franchise Agreement.
However, for franchisees in Washington, the standard payment schedule is altered. The Washington Rider to the Multi-Unit Development Agreement stipulates that no statement, questionnaire, or acknowledgment signed by a franchisee can waive claims under Washington franchise law or disclaim reliance on franchisor statements.
This means that in Washington, the enforceability of certain clauses, including those related to non-competition and restrictions on hiring, are subject to Washington state law. Specifically, non-competition covenants are void if the employee's annualized earnings are below $100,000, and franchisors cannot restrict franchisees from hiring employees of other franchisees or the franchisor. This addendum ensures that franchisees in Washington retain their rights under state law, regardless of any conflicting terms in the standard Bambu franchise agreement.