What payment terms can Bambu require from franchisees?
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 reserves the right to require the monthly Royalty Fee or the Marketing and Technology Fee payments be made on a weekly or bi-weekly basis if Franchisee does not timely or fully submit the required payment or maintain a sufficient amount in its accounts to permit Bambu to initiate a debt entry of amounts then due.
Notwithstanding any designation by Franchisee, Bambu shall have sole discretion to apply any payments by Franchisee, and any amounts received by Bambu on Franchisee's behalf from third party vendors or customers to any of Franchisee's past due indebtedness to Bambu for the Royalty Fee, the Marketing and Technology Fee, purchases from Bambu or its affiliates, interest or any other indebtedness.
Franchisee acknowledges that Bambu has the right to set-off any amounts Franchisee may owe to Bambu against any amounts Bambu might owe to Franchisee.
Franchisee shall not subordinate to any other obligation its obligation to pay the Royalty Fee or any other fee or charge hereunder.
In the event that Franchisee fails to have sufficient funds in its account or otherwise fails to pay the Marketing and Technology Fee, Royalty Fee, or other payments due to Bambu as of the date due, Franchisee shall owe in addition to the Marketing and Technology Fee, Royalty Fee, or other amounts due, interest at the highest applicable legal rate for open account credit, not to exceed 1½ percent per month.
Bambu reserves the right to automatically assess Franchisee a monthly $50 late charge for any Marketing and Technology Fee payment, Royalty Fee payment, or other payment due under this Agreement which is not timely paid, which late fee shall be due and payable in full upon demand.
Franchisee authorizes Bambu and its affiliates to initiate debit entries and credit entries to Franchisee's checking, savings or other account for the payment of the Royalty Fee (defined in Section 12.1), payment of the Marketing and Technology Fee (defined in Section 12.2), the purchase of equipment and inventory, and any other amounts due from Franchisee under this Agreement or otherwise. Bambu may require Franchisee to pay amounts due under this Agreement or otherwise by means in addition to or other than electronic funds transfer and Franchisee agrees to comply with Bambu's payment instructions.
Source: Item 23 — Receipts (FDD pages 52–209)
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, Bambu has several options regarding payment terms for franchisees. Bambu may require payments to be made at the time of order or even in cash on delivery (COD). Additionally, Bambu is authorized to initiate debit and credit entries to the franchisee's checking, savings, or other account for various payments, including the Royalty Fee, Marketing and Technology Fee, and purchases of equipment and inventory. Bambu can also require franchisees to pay amounts due via methods other than electronic funds transfer.
If a franchisee fails to make timely payments, Bambu can take further actions. They can require the monthly Royalty Fee or the Marketing and Technology Fee payments to be made on a weekly or bi-weekly basis if the franchisee does not submit payments on time or maintain sufficient funds in their accounts. Bambu also has the right to discontinue selling or permitting purchases through Bambu's account if the franchisee is in arrears on any payment to Bambu, its affiliates, or a third-party supplier, is in default under the Franchise Agreement, or is otherwise not in compliance with the terms and conditions imposed by Bambu. In such cases, Bambu may place the franchisee's account on hold and cease delivery of products already ordered but not yet paid for.
Furthermore, Bambu has the discretion to apply any payments received from the franchisee or from third-party vendors/customers on the franchisee's behalf to any past due indebtedness, including Royalty Fees, Marketing and Technology Fees, purchases from Bambu or its affiliates, interest, or any other indebtedness. Bambu can also set off any amounts the franchisee owes to Bambu against any amounts Bambu might owe to the franchisee. The franchisee's obligation to pay the Royalty Fee or any other fee or charge cannot be subordinated to any other obligation.
In the event of late payments, the franchisee will owe interest at the highest applicable legal rate for open account credit, not to exceed 1½ percent per month, in addition to the original amount due. Bambu also reserves the right to automatically assess a monthly $50 late charge for any late Marketing and Technology Fee payment, Royalty Fee payment, or other payment due under the Franchise Agreement. However, the interest rate will not exceed the maximum permitted by applicable law. These measures highlight the importance of franchisees maintaining good financial standing and adhering to the payment terms outlined in the Franchise Agreement to avoid penalties and potential disruptions to their supply of products.