Can the terms of subsequent Bambu Franchise Agreements differ from the initial Franchise Agreement?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
Each Franchise Agreement to be executed by Franchisee for each shoppe to
be developed hereunder shall be in the form of Franchise Agreement then generally being offered to franchisees by Bambu, which may contain terms substantially different from the terms of the initial Franchise Agreement executed hereunder. Notwithstanding the foregoing, Bambu agrees that it will not charge an initial franchise fee to Franchisee which is greater than the amounts set forth in Section 2.1(b) above. Franchisee acknowledges that Bambu has the right, however, to charge then current rates for royalty fees and all other fees, and for purchases of products and services offered to Franchisee, in accordance with Bambu's then-current franchise agreement.
Source: Item 23 — Receipts (FDD pages 52–209)
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, the terms of subsequent Franchise Agreements can differ substantially from the initial agreement. Specifically, if a franchisee is developing multiple shoppes under a MUD Agreement, each subsequent Franchise Agreement executed for each shoppe will be in the form then generally offered by Bambu, which may contain terms substantially different from the initial Franchise Agreement. However, Bambu agrees not to charge an initial franchise fee greater than the amount specified in the MUD Agreement.
This means that while the initial franchise fee is capped as per the MUD Agreement, other fees such as royalty fees, and fees for products and services, can be charged at the then-current rates outlined in Bambu's current franchise agreement. This is a crucial point for franchisees planning to develop multiple locations, as the financial obligations and operational terms could evolve over time.
Furthermore, when a franchisee transfers their rights, the new Franchise Agreement signed by the transferee may also differ substantially from the original agreement. However, the transferee will not be required to pay an additional initial franchise fee. Similarly, at the end of the initial term, if a franchisee seeks successor franchise rights, the new Franchise Agreement may have terms substantially different from the original agreement. This condition underscores the importance of carefully reviewing the terms of any renewal or transfer agreements to understand the current obligations and conditions.