Under what circumstances, if any, is the initial franchise fee refundable to a Bambu franchisee?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
ts payment for the grant of the development rights and for a reserved Development Area and Bambu has fully earned the Development Fee upon receipt.
- (b) The initial franchise fee for each such additional shoppe shall be $39,000. Bambu will credit $19,000 of the Development Fee to the initial franchise fee due under the Franchise Agreement for each of the second and subsequent shoppes to be developed under this MUD Agreement. After applying the credit for the portion of the Development Fee as described above, the balance of the initial franchise fee of $20,000 shall be due upon execution of the Franchise Agreement for that shoppe, but no later than the deadline set forth in the Development Schedule (defined in Section 3.1) for signing that Franchise Agreement. Franchisee shall also be required to pay the Training Fee set forth under each Franchise Agreement in such manner and time as set forth in each Franchise Agreement.
- (c) Other than to have applied the portions of the Development Fee to a portion of the initial franchise fee for subsequent Franchise Agreements as described in Section 2.1(b), all fees hereunder are nonrefundable once paid to Bambu and under no circumstances will Franchisee be entitled to a refund, return or rebate of any portion of initial franchise fees paid hereunder.
3. DEVELOPMENT OBLIGATIONS
- 3.1. Development Schedule. Franchisee agrees to develop the following number of shoppes in the Development Area, including the shoppe to be developed under the Franchise Agreement executed concurrently with this MUD Agreement, in accordance with development schedule set forth in the Addendum (the "Development Schedule"). Franchisee agrees that time is of the essence with respect to compliance with the Development Schedule, payment of the balance of the initial franchise fees under Section 2.1(b) above and any and all other obligations to be performed by Franchisee hereunder. Further, Franchisee shall continuously maintain in operation at least the number of shoppes set forth on the Development Schedule.
- 3.2. Subsequent Franchise Agreements. The parties agree that a separate Franchise Agreement shall be executed by the parties to this MUD Agreement for each shoppe to be developed under this MUD Agreement.
Source: Item 23 — Receipts (FDD pages 52–209)
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, the initial franchise fee and other fees are generally nonrefundable, but there are exceptions for franchisees in Virginia and Washington.
For a multi-unit development agreement, the initial franchise fee for each additional shoppe is $39,000. Bambu will credit $19,000 of the development fee to the initial franchise fee due under the Franchise Agreement for each of the second and subsequent shoppes to be developed. The balance of the initial franchise fee of $20,000 is due upon execution of the Franchise Agreement for that shoppe. However, all fees are nonrefundable once paid to Bambu, with the exception of the credit of $19,000 of the development fee to the initial franchise fee for subsequent franchise agreements.
The Virginia Rider to the Franchise Agreement states that 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. Similarly, the Washington Rider states that the Securities Administrator of the State of Washington has determined that Bambu may not be able to fulfill its obligations, and therefore payment of all initial fees is deferred until Bambu has completed its initial obligations and the franchisee's Bambu shoppe opens. This deferral of payment in Virginia and Washington effectively makes the initial fee refundable if Bambu fails to fulfill its pre-opening obligations.