Under what conditions will Bambu accept payment of the initial franchise fee?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
Item 5 of the Disclosure Document is amended to state that the payment of the initial fees payable to us and any of our affiliates is deferred until all of our initial obligations under the Franchise Agreement have been fulfilled by us and you have commenced doing business pursuant to the Franchise Agreement. In addition, all development fees by area developers shall be deferred until we have fulfilled all of our initial obligations to you under the Franchise Agreement for your first Bambū shoppe developed under the development agreement and you have commenced business of that first Bambū shoppe. The Illinois Attorney General's Office imposed this deferral requirement due to our financial condition.
Source: Item 23 — Receipts (FDD pages 52–209)
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, the standard procedure for initial franchise fee payment is modified for franchisees in Illinois. Item 5 of the Disclosure Document is amended to state that the payment of initial fees to Bambu and its affiliates is deferred until Bambu has fulfilled all initial obligations under the Franchise Agreement, and the franchisee has commenced business. This deferral also applies to development fees for area developers until Bambu fulfills its obligations for the first Bambu shoppe developed under the development agreement, and the franchisee has commenced business at that first shoppe.
This deferral requirement was imposed by the Illinois Attorney General's Office due to Bambu's financial condition. This means that in Illinois, franchisees do not have to pay the initial franchise fee upfront. Instead, they pay after Bambu has met its initial obligations and the franchisee has started operating their Bambu shoppe. This arrangement potentially reduces the initial financial risk for franchisees in Illinois, as they are not required to pay the fee until the franchise is operational and Bambu has fulfilled its initial responsibilities.
It is important to note that this deferral is specific to Illinois and is a result of Bambu's financial condition. Franchisees in other states may be subject to different payment terms for the initial franchise fee. Prospective franchisees should carefully review Item 5 of the Disclosure Document and any state-specific addenda to understand the payment terms applicable to their situation. Franchisees should also consult with a franchise attorney to fully understand the implications of this deferral and how it may affect their rights and obligations under the Franchise Agreement.