Is there an additional statement added to Section 4.1 of the Bambu Franchise Agreement?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
arbitration provisions and other dispute avoidance and resolution provisions and to rely on federal pre-emption under the Federal Arbitration Act.
VIRGINIA RIDER TO FRANCHISE AGREEMENT
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- Section 24.16 of the Agreement will not be applicable to the Agreement signed by a Virginia franchisee entering into the attached Agreement.
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- The following statement is added to Section 4.1:
The Virginia State Corporation Commission's Division of Securities and Retail Franchising requires Bambu to defer payment of the initial franchise fee and other initial payments owed by Franchisee to Bambu until Bambu has completed its pre-opening obligations under this Agreement.
- No statement, questionnaire, or acknowledgment signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor. This provision supersedes any other term of any document executed in connection with the franchise. Section 24.25 of the Agreement is deemed modified accordingly.
WASHINGTON RIDER TO FRANCHISE AGREEMENT AND RELATED AGREEMENTS
- 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.
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Source: Item 23 — Receipts (FDD pages 52–209)
What This Means (2025 FDD)
According to the 2025 Bambu Franchise Disclosure Document, there are additional statements added to Section 4.1 of the Franchise Agreement for franchisees in Virginia, Washington, Hawaii, and Maryland.
For Virginia franchisees, the Virginia State Corporation Commission requires Bambu to defer payment of the initial franchise fee and other initial payments until Bambu has completed its pre-opening obligations under the agreement. For Washington franchisees, the Securities Administrator of the State of Washington has determined that Bambu may not be able to fulfill its obligations to the 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 until Bambu has completed its initial obligations and the franchisee's Bambū shoppe opens.
For Hawaii franchisees, all initial fees payable to Bambu must be deferred until Bambu has fulfilled all of its initial obligations to the franchisee. For Maryland franchisees, the Maryland Securities Commissioner has required a financial assurance based on Bambu's financial condition. Therefore, all initial franchise fees and payments owed by franchisees must be deferred until Bambu completes its pre-opening obligations under the franchise agreement. In addition, all development fees and initial payments by area developers must be deferred until the first franchise under the development agreement opens.
These additional statements to Section 4.1 are specific to franchisees in Virginia, Washington, Hawaii, and Maryland and address the timing of initial fee payments, linking them to the completion of pre-opening obligations by Bambu. This could benefit franchisees by reducing their upfront financial risk, as they are not required to pay the initial franchise fee until Bambu has fulfilled its obligations.