What conditions must a Bambu franchisee meet for Bambu's consent to transfer the MUD Agreement not to be unreasonably withheld?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee, provided that Bambu has fulfilled its obligations hereunder or has made adequate provisions therefor.
- 5.2. Assignment by Franchisee. Because the rights granted herein are personal to Franchisee, Franchisee shall not transfer, assign or convey this MUD Agreement or any interest hereunder without Bambu's prior written consent which consent shall not be unreasonably withheld if Franchisee complies with the transfer provisions of the Franchise Agreement most recently executed by Bambu and Franchisee, which provisions shall be deemed to be incorporated herein by reference. Bambu reserves the right to require the transferee to sign the then-current form of MUD Agreement with materially different terms and conditions that may be negotiated between the parties depending on the circumstances of the transfer. Franchisee is prohibited from granting a subfranchise hereunder. As used in this MUD Agreement, the term "transfer" shall have the meaning set forth in the Franchise Agreement most recently signed by Bambu and Franchisee. In addition to any conditions contained in this MUD Agreement, the conditions for Bambu's approval of any transfer shall be the same as the conditions contained in the Franchise Agreement most recently executed by Bambu and Franchisee, which provisions shall be deemed to be incorporated herein by reference.
- 5.3. Transfer Fee. In the event of any proposed sale, transfer or assignment by Franchisee as described herein, Franchisee or the proposed transferee shall pay to Bambu the standard transfer fee for each franchise to be transferred, as governed by the applicable Franchise Agreement executed pursuant to this MUD Agreement, plus $7,500 for every undeveloped franchise right for which no Franchise Agreement has been executed.
5.4. Bambu Right of First Refusal. In the event of any proposed sale, transfer or assignment of its rights under this MUD Agreement or any interest in it or all or any part of the franchise development rights, or assets directly or indirectly related to the franchise development rights, Franchisee agrees to grant Bambu a 30-day right of first refusal to purchase such rights or assets on the same terms and conditions as are contained in the initial Franchise Agreement executed hereunder.
6. RESTRICTIVE COVENANTS
6.1. Restrictive Covenants. During the term and after the termination of this MUD Agreement or any Franchise Agreement signed in furtherance of this MUD Agreement, Franchisee and its Approved Affiliates and their officers, partners, directors, managers, agents or employees who have completed Bambu's training programs or had access to the Resource Center Materials, as described in the Franchise Agreement, or the beneficial owners of a five percent or greater interest in Franchisee or an Approved Affiliate and their respective immediate families, shall be subject to all restrictive covenants as set forth in the Franchise Agreement executed concurrently herewith, and in any nondisclosure and noncompetition agreements executed by Franchisee, its Approved Affiliates, or their employees, owners, managers, members, partners, officers, directors, agents or representatives, which covenants by this reference are incorporated herein.
7. BUSINESS RELATIONSHIPS
- 7.1. Independent Contractor.
Source: Item 23 — Receipts (FDD pages 52–209)
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, a franchisee needs to comply with specific transfer provisions outlined in the most recently executed Franchise Agreement to ensure that Bambu's consent to transfer the MUD (Multi-Unit Development) Agreement is not unreasonably withheld. These provisions are incorporated by reference into the MUD Agreement. This means the franchisee must meet all conditions specified in the Franchise Agreement related to transfers.
Specifically, the franchisee must fulfill several preconditions before transferring their rights under the MUD Agreement. First, the Bambu shoppe must have been open for business and operating for at least 30 days. Second, the franchisee must obtain written consent from Bambu and comply with all outlined requirements. These requirements include paying all outstanding amounts owed to Bambu or its affiliates, as well as to any third parties holding a security interest in the franchised business's assets, and otherwise being in full compliance with the MUD Agreement.
Additionally, the proposed transferee must agree to complete the Training Program satisfactorily, which can occur either before or immediately after the assignment. The transferee must also execute a Franchise Agreement (or an equivalent type then offered by Bambu) and any related documents like a Guaranty and Assumption of Franchisee's Obligations and Nondisclosure and Noncompetition Agreement, using the forms currently required by Bambu. While the terms of the new Franchise Agreement may differ substantially from the original, the transferee will not be required to pay an additional initial franchise fee. Finally, the franchisee must provide Bambu with written notice 30 days before the proposed transfer date, including detailed information about the transfer terms and a written offer from the proposed transferee, enabling Bambu to evaluate the proposed transfer.