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Bambu

Bambu Franchising LLC
https://www.drinkbambu.com
1-303-808-9393
6000 East Evans Ave., Bldg. 2, Suite 210, Denver, Colorado 80222

Initial Investment Range

$149,000 to $328,000

Franchise Fee

$39,000 to $49,000

Bambū shoppes featuring freshly made Vietnamese dessert drinks (Chè), Vietnamese style coffee drinks (Cà Phê), Vietnamese style blended yogurts (Yonami), Asian-inspired teas (including Taiwanese bubble tea), and real fruit smoothies (Sinh), with freshly made tapioca boba, house-prepared proprietary ingredients, and a wide variety of drink toppings, along with mochi waffles and other complementary snack, food and dessert items.

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Bambu March 31, 2025 FDD Risk Analysis

Free FDD Library AI Analysis Date: July 16, 2025

DISCLAIMER: Not Legal Advice - For Informational Purposes Only. Consult With Qualified Franchise Professionals.

1

Franchisor Stability Risks

Start Here
Total: 10
2
4
4

Disclosure of Franchisor's Financial Instability

High Risk

Explanation

Bambu Franchising LLC's (Bambu) own FDD explicitly warns that its financial condition "calls into question the franchisor's financial ability to provide services and support to you." The audited financial statements confirm this, showing a members' deficit (negative net worth) of over $1.8 million in 2024 and a history of significant operating losses. This financial weakness could severely impact Bambu's ability to support your business or even remain operational.

Potential Mitigations

  • Your accountant must conduct a deep analysis of the financial statements, including all footnotes, to assess the franchisor's viability.
  • A franchise attorney should review any state-mandated financial assurances, like fee deferrals, to understand the limited protections they offer.
  • Discuss the direct implications of this financial instability on promised support and brand growth with a business advisor.
Citations: Special Risks, Item 21, Exhibit J

High Franchisee Turnover

High Risk

Explanation

Item 20 data reveals a high rate of franchisee unit closures. In 2024, the system started with 69 franchised outlets and ended with 60, a net decrease of 9 units. While 3 closures are attributed to relocations, the remaining 9 still represent a high churn rate of approximately 13% in a single year. This volume of closures under "Ceased Operations - Other Reasons" is a significant indicator of potential systemic issues or franchisee unprofitability.

Potential Mitigations

  • It is critical to contact a significant number of former franchisees from the list in Exhibit I to understand their reasons for leaving.
  • Engage your accountant to analyze the turnover rates over the past three years and discuss the potential financial unsustainability this may indicate.
  • A franchise attorney can help you frame questions for the franchisor regarding the high number of ceased operations.
Citations: Item 20

Rapid System Growth

Low Risk

Explanation

This risk was not specifically identified in the FDD package. Rapid, uncontrolled growth can strain a franchisor's ability to provide adequate support to all franchisees. While Bambu's system has grown in prior years, the most recent data in Item 20 for 2024 shows a net decline in the number of outlets, indicating that excessively rapid expansion is not a current primary risk.

Potential Mitigations

  • Your business advisor can help evaluate the franchisor's support infrastructure relative to its total number of units.
  • Asking current franchisees about the quality and timeliness of franchisor support is a valuable due diligence step.
  • An accountant can analyze the franchisor's financial statements to determine if they are investing adequately in support systems.
Citations: Item 20

New/Unproven Franchise System

Medium Risk

Explanation

Bambu Franchising LLC was formed in late 2014 and began franchising in 2015 after acquiring predecessor assets. While no longer a startup, the system's high franchisee turnover rate detailed in Item 20 and its poor financial condition in Item 21 suggest potential challenges with the long-term viability or profitability of its business model. This combination of factors increases the risk profile beyond that of a more stable, established system.

Potential Mitigations

  • Your business advisor should help you conduct deep due diligence on the system's history and the management team's experience.
  • Engaging an accountant to scrutinize the financials is crucial to understanding the franchisor's stability.
  • Speaking with a wide range of current and former franchisees to gauge their experiences and profitability is essential.
Citations: Items 1, 2, 20, 21

Possible Fad Business

Low Risk

Explanation

This risk was not identified in the FDD package. A "fad" business is one based on a short-lived trend, creating risk for long-term franchisee investment. The market for Asian-inspired beverages, coffee, and teas, as described in Item 1, has demonstrated sustained consumer demand and is a well-established segment of the food and beverage industry, suggesting the core business is not a temporary fad.

Potential Mitigations

  • To assess long-term market viability, consider engaging a business advisor to research industry trends and consumer demand.
  • You should evaluate the franchisor's plans for product innovation and adaptation to evolving consumer tastes.
  • An accountant can help you model different market scenarios to understand the business's potential resilience.
Citations: Item 1

Inexperienced Management

Medium Risk

Explanation

While the key personnel listed in Item 2 have experience in the food and franchise industries, the company's poor financial performance, including consistent losses and a large negative net worth as shown in Item 21, raises questions about management's ability to lead the system to profitability and stability. This performance could suggest challenges in strategic direction or operational execution, which presents a risk to your investment.

Potential Mitigations

  • A thorough review of the management team's track record and performance at Bambu with your business advisor is important.
  • It is crucial to speak with current franchisees about their confidence in the management team and the quality of strategic leadership.
  • Your accountant should analyze the financial statements in Item 21 to understand the historical financial stewardship of the company.
Citations: Items 1, 2, 21

Private Equity Ownership

Low Risk

Explanation

This risk was not identified in the FDD package. Item 1 does not indicate that Bambu is owned or controlled by a private equity firm. The company appears to be privately held by its management. Therefore, risks specifically associated with a private equity ownership model, such as a focus on short-term returns over long-term system health, do not appear to be present.

Potential Mitigations

  • Your attorney can help you verify the ownership structure of the franchisor through public records.
  • A business advisor can help you understand the implications of different ownership structures on a franchise system.
  • It's always wise to ask the franchisor about any potential plans to sell the company.
Citations: Item 1

Non-Disclosure of Parent Company

Low Risk

Explanation

This risk was not identified in the FDD package. A parent company is a separate entity that has a controlling interest in the franchisor. Bambu's FDD does not disclose the existence of a parent company. The financial statements provided are for Bambu Franchising LLC itself. Therefore, the risk of material information being obscured by the non-disclosure of a parent entity does not appear to apply here.

Potential Mitigations

  • Your attorney should confirm the franchisor's corporate structure and verify the absence of a parent company.
  • When reviewing any franchise, it's good practice for your accountant to check if a thinly capitalized subsidiary is relying on an undisclosed parent.
  • Always ensure that the provided financial statements correspond to the actual entity you are contracting with.
Citations: Item 1, Item 21, Exhibit J

Predecessor History Issues

Medium Risk

Explanation

Item 1 discloses that Bambu acquired the system in 2015 from three predecessor entities. Item 3 discloses that these predecessors were involved in regulatory actions in Virginia and Maryland for franchise law violations, for which Bambu paid restitution on their behalf. This history, although involving prior entities, indicates past compliance issues within the system's lineage, which could be a concern for a prospective franchisee.

Potential Mitigations

  • Your attorney should carefully review the details of the predecessor litigation disclosed in Item 3.
  • A business advisor can help you assess how the current franchisor may have addressed the issues that led to past problems.
  • Consider asking long-term franchisees about their experiences during the transition from the predecessor.
Citations: Items 1, 3

Pattern of Litigation

Medium Risk

Explanation

Item 3 discloses litigation initiated by a franchisee against Bambu for an alleged territory violation, which was ultimately settled. It also details two past regulatory actions against Bambu's predecessors for franchise law violations. While not an extensive pattern of fraud claims, this history of disputes with a franchisee and regulators regarding core franchise rights and compliance is a significant concern and suggests potential for future conflicts.

Potential Mitigations

  • A franchise attorney must carefully review the nature and resolution of all disclosed litigation to assess potential systemic problems.
  • You should discuss the litigation history with the franchisor to understand their perspective and any changes made as a result.
  • It is wise to speak with other franchisees about their experiences with the franchisor when disputes arise.
Citations: Item 3
2

Disclosure & Representation Risks

Total: 15
4
0
11

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

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3

Financial & Fee Risks

Total: 10
3
4
3

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

Unlock Full Risk Analysis

Purchase the complete risk review to see all 102 risks across all 10 categories.

4

Legal & Contract Risks

Total: 16
7
7
2

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

Unlock Full Risk Analysis

Purchase the complete risk review to see all 102 risks across all 10 categories.

5

Territory & Competition Risks

Total: 5
2
2
1

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

Unlock Full Risk Analysis

Purchase the complete risk review to see all 102 risks across all 10 categories.

6

Regulatory & Compliance Risks

Total: 10
6
2
2

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

Unlock Full Risk Analysis

Purchase the complete risk review to see all 102 risks across all 10 categories.

7

Franchisor Support Risks

Total: 4
2
2
0

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

Unlock Full Risk Analysis

Purchase the complete risk review to see all 102 risks across all 10 categories.

8

Operational Control Risks

Total: 12
4
5
3

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

Unlock Full Risk Analysis

Purchase the complete risk review to see all 102 risks across all 10 categories.

9

Term & Exit Risks

Total: 18
9
8
1

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

Unlock Full Risk Analysis

Purchase the complete risk review to see all 102 risks across all 10 categories.

10

Miscellaneous Risks

Total: 2
1
1
0

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

Unlock Full Risk Analysis

Purchase the complete risk review to see all 102 risks across all 10 categories.