What is the relationship between the initial franchise fee for a Bambu franchise in Item 5 and the potential need for upgrading expenses as described in Item 6?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
tion is required to be disclosed in this Item.
ITEM 5
INITIAL FEES
Franchise Agreement
The initial franchise fee ("Initial Franchise Fee") is $49,000. The Initial Franchise Fee is due in four installments: (1) a non-refundable payment of $15,000 due when you sign the Franchise Agreement for your Bambū shoppe; (2) a non-refundable payment of $10,000 when your lease for your Bambū shoppe is presented to us for review; (3) a non-refundable payment of $15,000 when you take possession of the leased premises, and (4) a non-refundable payment of $9,000 when your opening training program is scheduled. We may reduce or waive the Initial Franchise Fee for franchisees in non-traditional locations or for a franchisee who obtained a suitable location prior to signing the Franchise Agreement, in our discretion. We will discount your initial fee for a second or subsequent shoppe if you qualify to open more than one shoppe at a time pursuant to a MUD Agreement as described below.
Multi-Unit Development Agreement
If you enter into a MUD Agreement, you will sign that agreement together with the Franchise Agreement for your first Bambū shoppe. You will pay the Initial Franchise Fee for the first Bambū shoppe in accordance with the terms of the Franchise Agreement, as described above, and under the MUD Agreement, you will also pay a development fee equal to $19,000 times the number of additional shoppes to be developed under the MUD Agreement (the "Development Fee").
The Initial Franchise Fee for the second and each subsequent Bambū shoppe to be opened under the MUD Agreement will be $39,000. The $19,000 portion of the Development Fee paid for each of the second and subsequent Bambū shoppes to be developed under the MUD Agreement is credited toward the Initial
Franchise Fee to be paid for that additional shoppe. The balance of the Initial Franchise Fee ($20,000) is due upon execution of the Franchise Agreement for that shoppe, but no later than the deadline set forth in the MUD Agreement for signing the Franchise Agreement related to that shoppe.
The Initial Franchise Fee, Development Fee and other expenses set forth in this Item 5, once paid, are nonrefundable. Except as may be described in this Item 5, all franchisees currently acquiring a franchise pay the same franchise fees.
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, Item 5 details the initial franchise fee, while Item 11 (not Item 6 as stated in the question) discusses the franchisee's obligation to upgrade the property and equipment. The initial franchise fee for a standard franchise agreement is $49,000, payable in installments. However, this fee does not cover potential future upgrade, remodel, or replacement costs of the Bambu shoppe. These upgrades are required if Bambu requests them on a system-wide basis, as stated in Item 11.
For franchisees entering into a Multi-Unit Development (MUD) Agreement, the initial franchise fee for the second and subsequent shoppes is $39,000. A portion of the development fee ($19,000) is credited towards this initial franchise fee, with the balance ($20,000) due upon execution of the Franchise Agreement. Regardless of the initial franchise fee structure, all franchisees may be required to incur additional expenses for upgrades, remodels, or replacements during the term of the franchise agreement.
This means that in addition to the initial investment, a Bambu franchisee should be prepared for potential future capital expenditures to keep their shoppe aligned with the brand's current standards. These upgrade costs are separate from the initial franchise fee and are determined at Bambu's discretion. Prospective franchisees should inquire about the typical frequency and estimated costs of these required upgrades to better understand the long-term financial commitment.