When does Bambu recognize revenue from product sales to its franchisees?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
ity to supply Franchisee's needs in the quantities, at the times, and with the reliability requisite to an efficient operation of the Bambū shoppe. Bambu reserves the right to derive revenue from Franchisee's purchases of food items, products or programs, whether the purchase is from Bambu, Bambu's affiliate or another designated or approved source and irrespective of whether a formal purchase or buying arrangement has been established. Franchisee must execute any agreement as may be reasonably required by a Supplier and establish the appropriate credit terms with it.
- 14.6 Request to Approve Supplier. In the event Franchisee desires to purchase or use inventory, products, equipment, supplies, materials, services or programs from suppliers other than those previously approved by Bambu, Franchisee shall, prior to purchasing from or otherwise utilizing any supplier give Bambu a written request to approve the supplier.
Source: Item 23 — Receipts (FDD pages 52–209)
What This Means (2025 FDD)
Based on the 2025 Bambu Franchise Disclosure Document, Bambu reserves the right to derive revenue from a franchisee's purchases of food items, products, or programs. This applies whether the purchase is directly from Bambu, through Bambu's affiliates, or from another designated or approved source. This revenue recognition occurs regardless of whether a formal purchase or buying arrangement has been officially established.
This means that Bambu can generate revenue not only from franchise fees and royalties but also from the products and supplies that franchisees are required to purchase for their daily operations. As a franchisee, you are generally obligated to buy these items from Bambu or its approved suppliers, allowing Bambu to profit from these sales.
Furthermore, Bambu may require payments to be made at the time of order or in cash on delivery (COD). If a franchisee falls behind on payments to Bambu, its affiliates, or a third-party supplier, or if they are in default of the Franchise Agreement, Bambu can discontinue selling or permitting the purchase of any products through Bambu's account. They may also put the franchisee's account on hold and stop the delivery of products already ordered but not yet paid for. This highlights the importance of maintaining good financial standing with Bambu and its suppliers to ensure a smooth supply of necessary products and avoid disruptions to the business.