Under what circumstances is Bambu required to collect taxes from the Bambu franchisee?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee shall reimburse Bambu, or its affiliates and designees, promptly and when due, the amount of any state sales taxes, use taxes, personal property taxes and similar taxes imposed upon, required to be collected or paid by Bambu, or its affiliates or designees, on account of services or goods furnished by Bambu, its affiliates or designees, to Franchisee through sale, lease or otherwise (except for any taxes Bambu or its affiliates are required by law to collect from Franchisee with respect to products purchased from Bambu and its affiliates), or on account of collection by Bambu of the franchise fee, or any other payments made by Franchisee to Bambu required under the terms of this Agreement.
Source: Item 23 — Receipts (FDD pages 52–209)
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, Bambu is required to collect taxes from its franchisees under specific circumstances related to the products franchisees purchase from Bambu. Specifically, Bambu must collect taxes from franchisees when required by law with respect to products purchased from Bambu and its affiliates.
Beyond this specific instance, the FDD clarifies the franchisee's broader responsibilities regarding taxes. Franchisees are responsible for paying all amounts due to third parties, including taxing authorities, for business conducted at or through their shoppe. Franchisees must also reimburse Bambu for any state sales taxes, use taxes, personal property taxes, and similar taxes imposed on Bambu due to goods or services furnished to the franchisee. This reimbursement is required promptly when these taxes are due.
In essence, while Bambu is obligated to collect sales taxes on products it sells directly to franchisees when legally mandated, the franchisee bears the primary responsibility for all other taxes associated with their Bambu shoppe's operation. This includes sales taxes collected from customers, as well as other business-related taxes. Franchisees should consult with a tax professional to ensure they understand and comply with all applicable tax laws and regulations.