Can Bambu reimburse itself from the Marketing and Technology Fund for administrative costs?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
he "Technology"). We do not spend the Marketing and Technology Fund's money on soliciting franchisees.
We may reimburse ourselves from the Marketing and Technology Fund for administrative costs, salaries and overhead expenses related to the administration of the Marketing and Technology Fund and its programs, including conducting market research, preparing material, collecting and accounting for Marketing and Technology Fund contributions, providing any services related to any Technology, and all costs and expenses related to the Franchisee Advisory Council discussed below. In any fiscal year we may spend an amount greater or less than the aggregate contribution of all Bambū shoppes to the Marketing and Technology Fund in that year. The Marketing and Technology Fund may borrow from us or other lenders to cover deficits or cause the Marketing and Technology Fund to invest any surplus for future use. Any amounts remaining in the Marketing and Technology Fund at the end of each year accrue and we apply them toward the next year's expenses. We do not guarantee that advertising expenditures from the Marketing and Technology Fund will benefit you or any other franchisee directly or on a pro rata basis. The Marketing and Technology Fund is not a trust fund, and we do not owe a fiduciary duty to you with respect to the maintenance, direction, or administration of the Fund. We assume no other direct or indirect liability or obligation to you for collecting amounts due to any marketing account or for maintaining, directing or administering any advertising account.
We may use outside advertising agencies and personnel and in-house personnel to create international, national, or regional advertising, including social media ads, ad slicks, radio and television spots and other marketing pieces and programs and we may purchase and place national advertising.
Source: Item 11 — Franchisor's Assistance, Advertising, Computer Systems, and Training (FDD pages 28–38)
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, Bambu can reimburse itself from the Marketing and Technology Fund. This reimbursement covers administrative costs, salaries, and overhead expenses related to managing the fund and its programs. These programs include market research, preparing materials, collecting contributions, providing technology services, and covering expenses related to the Franchisee Advisory Council.
This means that a portion of the funds that franchisees contribute to the Marketing and Technology Fund can be used to cover Bambu's internal costs associated with administering the fund. While this is a common practice in franchising, it's important for prospective franchisees to understand how their contributions are being used. The FDD also states that Bambu may spend more or less than the aggregate contributions in any fiscal year and may borrow or invest surplus funds.
Bambu does not guarantee that advertising expenditures from the Marketing and Technology Fund will directly benefit each franchisee or be distributed on a pro rata basis. The document specifies that the Marketing and Technology Fund is not a trust fund, and Bambu does not have a fiduciary duty to franchisees regarding the fund's maintenance, direction, or administration. This indicates that Bambu has significant discretion in how the fund is managed and spent. During the 2024 fiscal year, none of the Marketing and Technology Fund was spent on administrative expenses.
Prospective franchisees should carefully consider these factors and request the annual unaudited financial statement for the Marketing and Technology Fund to understand how the funds are allocated. Understanding the allocation of the Marketing and Technology Fund can help franchisees assess the value and potential return on their investment in the Bambu franchise system.