Besides a franchisee's failure to comply with the terms of the agreement, what other event allows Bambu to terminate the agreement after a 60-day cure period?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
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- The following subsection is added to Section 19.2:
- c. Failure to Pay Third Party Obligations. Franchisee fails to pay all taxes and other obligations owed to third parties related to the operation of the Bambū shoppe.
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- The last sentence of Section 19.2 is deleted in its entirety and the following provision is substituted in its place:
Notwithstanding the foregoing, if the breach is curable, but is of a nature which cannot be reasonably cured within 60 days, and Franchisee has commenced and is continuing to make good faith efforts to cure the breach, Franchisee shall be given an additional period of time to cure the breach, but in no case more than 75 days following Bambu'
Source: Item 23 — Receipts (FDD pages 52–209)
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, Bambu can terminate the franchise agreement if the franchisee fails to pay taxes and other obligations owed to third parties related to the operation of the Bambu shoppe. In this case, the franchisee has 60 days to cure the breach. However, if the breach cannot be reasonably cured within 60 days, and the franchisee has commenced and is continuing to make good faith efforts to cure the breach, the franchisee shall be given an additional period of time to cure the breach, but in no case more than 75 days following Bambu'.
This means that a Bambu franchisee must ensure all financial obligations to third parties, such as suppliers, landlords, and tax authorities, are met. Failure to do so can lead to the termination of the franchise agreement. The 60-day cure period offers some protection, allowing the franchisee time to rectify the situation. However, it's crucial to act promptly and demonstrate good faith efforts to resolve the issue within that timeframe, or risk losing the franchise.
This condition is relatively common in franchise agreements, as franchisors want to protect their brand's reputation and ensure franchisees operate responsibly. Unpaid obligations can lead to legal issues, damage the brand's image, and potentially disrupt the supply chain or operations of other franchisees. Therefore, it is vital for prospective Bambu franchisees to have a solid financial plan and management system in place to avoid such defaults.