What pre-opening obligations must Bambu fulfill before receiving proportional payment of the franchise fee under a Multi-Unit Development Agreement?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
ntations made by Bambu.
MARYLAND RIDER TO FRANCHISE AGREEMENT
- The following is added to the end of Section 4.1:
Based on the franchisor's financial condition, the Maryland Securities Commissioner has required a financial assurance. Therefore, all initial franchise fees and payments owed by franchisees shall be deferred until the franchisor completes its pre-opening obligations under the franchise agreement. In addition, all development fees and initial payments by area developers shall be deferred until the first franchise under the development agreement opens.
- The following shall be added at the end of Sections 17.2.f and 18.3.d:
The general release required as a condition of renewal, sale, and/or assignment/transfer shall not apply to any liability under the Maryland Franchise Registration and Disclosure Law.
- The following sentence is added to the end of Section 23.
Source: Item 23 — Receipts (FDD pages 52–209)
What This Means (2025 FDD)
According to the 2025 Bambu Franchise Disclosure Document, the payment of initial franchise fees and development fees may be deferred until Bambu completes its pre-opening obligations under the Franchise Agreement, but this is only applicable to franchisees in Maryland and Virginia.
For Maryland franchisees, this deferral is required by the Maryland Securities Commissioner due to Bambu's financial condition. Therefore, all initial franchise fees and payments are deferred until Bambu completes its pre-opening obligations. Similarly, in Virginia, the Virginia State Corporation Commission's Division of Securities and Retail Franchising mandates the deferral of the Development Fee until Bambu completes its pre-opening obligations for the franchisee's first Bambu shoppe.
These stipulations ensure that franchisees in Maryland and Virginia are not required to pay fees until Bambu has fulfilled its initial responsibilities, providing a level of financial protection to the franchisee. Prospective franchisees in these states should confirm with Bambu what specific actions constitute these pre-opening obligations to ensure they are met before any fees become due.