Regarding the Rider to Addendum - Location Approval, what accounting practices are covered under section 4.1 for a Bambu franchise?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
f the franchisor. This provision supersedes any other term of any document executed in connection with the franchise.
HAWAII RIDER TO FRANCHISE AGREEMENT
- The following is added to the end of Section 4.1:
All initial fees payable to Bambu shall be deferred until Bambu has fulfilled all of its initial obligations to Franchisee.
- The following shall be added at the end of Sections 17.2.f and 18.3.d:
Any release executed pursuant to this Section will not apply to any claims that may arise under the Hawaii Franchise Investment Law.
- The following paragraph is added to Section 19.4:
Section 482E-6(3) of the Hawaii Revised Statutes provides that upon termination or refusal to renew the Franchise, Bambu is obligated to compensate Franchisee for the fair market value, at the time of the termination or expiration of the Franchise, of Franchisee's inventory, supplies, equipment and furnishings purchased from Bambu or a Supplier designated by Bambu;
Source: Item 23 — Receipts (FDD pages 52–209)
What This Means (2025 FDD)
According to the 2025 Bambu Franchise Disclosure Document, specific accounting practices covered under Section 4.1 are detailed in the Hawaii and Maryland Rider to Franchise Agreement.
In Hawaii, the rider states that all initial fees payable to Bambu are deferred until Bambu has fulfilled all of its initial obligations to the franchisee. This means a new Bambu franchisee in Hawaii will not have to pay any initial fees until Bambu has met its pre-opening obligations as outlined in the franchise agreement. This protects the franchisee by ensuring they only pay once Bambu has delivered on its initial promises.
For Maryland, the rider stipulates that all initial franchise fees and payments owed by franchisees are deferred until Bambu completes its pre-opening obligations under the franchise agreement. Additionally, all development fees and initial payments by area developers are deferred until the first franchise under the development agreement opens. This requirement is based on the franchisor's financial condition as determined by the Maryland Securities Commissioner, providing a financial assurance to franchisees in Maryland. This ensures that franchisees and area developers in Maryland are not required to pay initial fees until Bambu has fulfilled its pre-opening obligations or the first franchise location has opened, respectively.
These riders modify the standard franchise agreement to provide financial protections to franchisees in Hawaii and Maryland, ensuring that initial fees are deferred until Bambu has met its initial obligations.