What is the condition for Bambu and the franchisee to mutually terminate the Bambu Franchise Agreement?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
4. TERM AND TERMINATION
- 4.1. The term of this MUD Agreement shall commence as of the date of execution hereof and shall end on the earlier of (1) the date the last Franchise Agreement is executed to open the maximum number of shoppes set forth in the Addendum, or (2) the date of the deadline set forth in the Development Schedule for Franchisee to execute the Franchise Agreement for the last of its shoppes to be developed under this MUD Agreement. After expiration of the term, or earlier termination of this MUD Agreement as provided below, Bambu shall have the right to establish, or license any other party to establish shoppes anywhere within the Development Area; provided, however, that Franchisee's Protected Area as defined in the Franchise Agreements executed hereunder will remain in effect for the term of the Franchise Agreements, unless sooner terminated.
- 4.2. Termination by Franchisee. This MUD Agreement may be terminated by Franchisee for any reason upon 60 days prior written notice to all parties, provided that Franchisee will not be entitled to a refund of any fees paid hereunder under any circumstances.
- 4.3. Termination by Bambu. Franchisee shall be deemed in default and this MUD Agreement may be terminated by Bambu, at its option, in the following circumstances:
- (i) Franchisee defaults on any term or condition of this MUD Agreement, including without limitation, the failure to open and maintain the number of shoppes required by the Development Schedule, and fails to cure such default after 30 days written notice to Franchisee; or
- (ii) Franchisee is in default under any of the Franchise Agreements executed in furtherance of this MUD Agreement or any other agreement between Bambu or any of Bambu's
Source: Item 23 — Receipts (FDD pages 52–209)
What This Means (2025 FDD)
Based on the 2025 FDD, the conditions for mutual termination of the Bambu Franchise Agreement are not explicitly detailed. However, the document does outline circumstances under which either the franchisee or Bambu can independently terminate the agreement.
Specifically, the franchisee can terminate the MUD (Multi-Unit Development) Agreement for any reason with 60 days' prior written notice, but will not be entitled to a refund of any fees paid. Bambu, on the other hand, can terminate the Franchise Agreement under various default conditions, such as abandonment of the shoppe, absence of certified team leaders, or insolvency, generally effective immediately upon notice without opportunity to cure, unless state law dictates otherwise.
Additionally, Bambu has the option to not offer a successor franchise agreement if the franchisee fails to meet certain conditions, providing notice of expiration at least 180 days before the term ends. Upon termination or expiration, the franchisee has obligations such as paying outstanding fees, ceasing to identify as a Bambu franchisee, and maintaining confidentiality.
Since the FDD does not explicitly state the conditions for mutual termination, it would be prudent for a prospective franchisee to discuss this point directly with Bambu to understand what specific circumstances or agreements would allow for a mutual termination of the Franchise Agreement. This discussion should clarify the process, potential financial implications, and any specific requirements for both parties to agree to end the franchise relationship.