What is the required action for Bambu regarding pre-opening and initial training obligations in Washington before collecting franchise fees?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
- The following statement is added to Section 4.1:
The Securities Administrator of the State of Washington has determined that, based on Bambu's financial condition, Bambu may not be able to fulfill its obligations to Franchisee in the establishment and opening of the Bambū shoppe. Bambu has elected to assure financial capability by deferring the payment of all initial fees owed to Bambu until Bambu has completed its initial obligations under the Franchise Agreement and Franchisee's Bambū shoppe opens.
Source: Item 23 — Receipts (FDD pages 52–209)
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, a Washington Rider to the Franchise Agreement addresses the collection of initial fees. Due to Bambu's financial condition, the Securities Administrator of the State of Washington requires Bambu to defer the payment of all initial fees until Bambu completes its initial obligations under the Franchise Agreement and the franchisee's Bambu location opens.
This means that for franchisees in Washington, Bambu cannot collect any initial franchise fees until it has fulfilled its pre-opening obligations, including training and site preparation, and the Bambu store is open for business. This arrangement is designed to protect franchisees, given the state regulator's concerns about Bambu's financial stability to meet its obligations.
This condition affects the timing of payments and provides some financial security to the franchisee, ensuring that Bambu invests in setting up the store before receiving the initial franchise fee. Prospective franchisees in Washington should carefully review this rider and understand all of Bambu's pre-opening obligations to ensure they are met before the store opening.