What conditions must be met for Bambu to approve a transfer of a franchise?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise Agreement or Multi-Unit Development Agreement | Summary | |
|---|---|---|---|
| (h) | "Cause" defined-non-curable defaults | Section 19.1 of FA | For the Franchise Agreement: Unauthorized disclosure, conviction of a crime, abandonment, no Bambū Certified Team Leaders are present at or available to be at the Bambū shoppe for three consecutive days, unapproved transfers, bankruptcy 1 , assignment for benefit of creditors, unsatisfied judgments, levy, foreclosure, repeated violations, violate restrictive covenants, two insufficient funds checks, health and safety, misrepresentations, sexual harassment or discrimination, breach of other agreements between us or any of our affiliates and you or any of your affiliates, guaranty becomes unenforceable or inadequate, you become subject to the PATRIOT Act. |
| (i) | Franchisee's obligations on termination/non-renewal | Sections 19.3 and 19.4 of FA; Section 4.5 of MUDA | Pay outstanding amounts; pay an amount equal to the monthly Royalty Fees due over the remaining term under the Franchise Agreement if terminated due to your default; de-identification of shoppe; return of confidential information; covenant not to compete (see also o. and r. below); others. |
| (j) | Assignment of contract by franchisor | Section 17.6 of FA; Section 5.1 of MUDA | No restriction on our right to assign. |
| (k) | "Transfer" by franchisee – defined | Section 17.1 of FA; Section 5.2 of MUDA | Includes transfer of franchise agreement or shoppe, any change in ownership of franchisee entity, or the transfer of the assets of the shoppe. |
| (1) | Franchisor approval of transfer by franchisee | Sections 17.3 and 17.8 of FA; Section 5.2 of MUDA | We have the right to approve all transfers, we may not unreasonably withhold our consent. We have the right to approve any public or private offering. |
| (m) | Conditions for franchisor approval of transfer | Sections 17.2 and 17.8 of FA; Sections 5.2 and 5.3 of MUDA | For the Franchise Agreement: The following conditions will apply: Timely notice to us, transferee qualifies, all amounts due are paid in full and any defaults cured, transferee completes training, transfer fee paid, then current contract signed (which may contain terms and conditions materially different from the original Franchise Agreement), franchisee signs general release, noncompetition covenant, if requested upgrade shoppe, transferor remains liable. Review of public or private offering materials. For the MUD Agreement: The following conditions will apply in addition to those listed above: Fee for each undeveloped Bambū shoppe paid. |
Source: Item 17 — (FDD pages 44–46)
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, the franchisor has the right to approve all transfers, and they may not unreasonably withhold their consent.
For a Franchise Agreement transfer to be approved by Bambu, several conditions must be met. The franchisee must provide timely notice to Bambu. The person or entity to whom the franchise is being transferred (the transferee) must meet Bambu's qualifications. All outstanding amounts owed to Bambu must be paid in full, and any existing defaults must be resolved. The transferee is required to complete the then-current training program prescribed by Bambu. A transfer fee must be paid to Bambu. Both parties must sign Bambu’s then-current contract, which may contain terms and conditions that are materially different from the original Franchise Agreement. The franchisee (transferor) must sign a general release and a noncompetition covenant. If requested by Bambu, the franchisee may need to upgrade the shoppe. The original franchisee (transferor) remains liable even after the transfer.
For a Multi-Unit Development Agreement, the conditions above apply in addition to a fee for each undeveloped Bambu shoppe being paid.
These conditions are typical in franchising, as franchisors want to ensure that any new franchisee meets their standards and that the transfer does not negatively impact the brand. Prospective franchisees should carefully consider these conditions and discuss any concerns with Bambu before entering into a franchise agreement.