Under a Multi-Unit Development Agreement, when is the payment of the Bambu franchise fee released proportionally?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
o any agreement with respect to the Marks or Bambū system.
2. INITIAL FRANCHISE AND DEVELOPMENT FEES
2.1. Fees.
- (a) In consideration of the development rights granted herein, concurrently with the execution of this MUD Agreement Franchisee will pay to Bambu a development fee equal to $19,000 multiplied by the number of additional shoppes, beyond the first shoppe, to be developed hereunder ("Development Fee"). This Development Fee is in addition to the initial franchise fee applicable for the first shoppe to be developed hereunder, which must be paid in accordance with the terms of the Franchise Agreement for that shoppe. The total Development Fee is set forth in the Addendum. Franchisee acknowledges that the Development Fee represents 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
Source: Item 23 — Receipts (FDD pages 52–209)
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, franchisees who sign a Multi-Unit Development Agreement (MUD) with Bambu will pay a development fee of $19,000 for each additional store beyond the first. This fee compensates Bambu for granting development rights and reserving a specific development area. Bambu considers this fee fully earned upon receipt.
When a franchisee develops subsequent shoppes under the MUD agreement, $19,000 of the initial development fee is credited towards the $39,000 initial franchise fee for each additional location. The remaining balance of $20,000 for the initial franchise fee is due upon execution of the Franchise Agreement for that particular shoppe, but must be paid no later than the deadline outlined in the Development Schedule. Franchisees are also responsible for paying the Training Fee as specified in each individual Franchise Agreement.
It's important to note that all fees paid to Bambu under the MUD agreement, including the development fee and initial franchise fees (after the credit is applied), are nonrefundable. Franchisees are not entitled to any refunds, returns, or rebates once these fees have been paid to Bambu, except for the $19,000 credit towards the initial franchise fee for each subsequent shoppe.