Can an Approved Affiliate satisfy the development and operation obligations for a Bambu franchise?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
If you qualify, we may grant you the right to enter into a Multi-Unit Development Agreement ("MUD Agreement") to develop an agreed upon number of Bambū shoppes within a specific geographic territory according to a development schedule ("Development Schedule"). The form of MUD Agreement you will sign is attached as Exhibit B to this Disclosure Document. Your obligation to develop and operate franchises may be satisfied by you or by an entity owned by you or your owners ("Approved Affiliate"). For each Bambū shoppe developed under the MUD Agreement, you will sign a separate franchise agreement, which may be different than the form of Franchise Agreement attached to this Disclosure Document.
Source: Item 1 — The Franchisor and any Parents, Predecessors, and Affiliates (FDD pages 9–11)
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, if a franchisee qualifies for a Multi-Unit Development Agreement (MUD Agreement), their obligations to develop and operate franchises can be satisfied either by the franchisee themselves or by an entity they own, or by their owners, referred to as an "Approved Affiliate." This allows for flexibility in how the franchise development and operation are structured, potentially enabling franchisees to leverage existing business entities or create new ones for this purpose. For each Bambu shoppe developed under the MUD Agreement, the franchisee will sign a separate franchise agreement. This agreement may differ from the standard Franchise Agreement included in the disclosure document.
This arrangement is beneficial for franchisees who may want to separate their personal assets from the business or who plan to involve multiple owners in the development and operation of the Bambu franchises. By using an Approved Affiliate, the franchisee can create a distinct legal entity responsible for the franchise obligations, which can help in managing liability and streamlining operations. The MUD Agreement outlines the specific geographic territory and development schedule that the franchisee (or their Approved Affiliate) must adhere to.
It is important for prospective franchisees to carefully review the MUD Agreement and the separate franchise agreement for each shoppe, as the terms may vary from the standard franchise agreement. Franchisees should also ensure that their Approved Affiliate meets any specific requirements or qualifications set by Bambu. Consulting with legal and financial advisors is recommended to fully understand the implications of using an Approved Affiliate and to ensure compliance with all relevant regulations.