What is the consequence if a Bambu franchisee makes an assignment for the benefit of creditors?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
If Franchisee becomes insolvent or is adjudicated a bankrupt; or if any action is taken by Franchisee, or by others against Franchisee under any insolvency, bankruptcy or reorganization act, (this provision may not be enforceable under federal bankruptcy law, 11 U.S.C. §§ 101 et seq.); or if Franchisee makes an assignment for the benefit of creditors or a receiver is appointed by Franchisee.
Source: Item 23 — Receipts (FDD pages 52–209)
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, if a franchisee makes an assignment for the benefit of creditors, it can be considered an event of default under the franchise agreement.
This means that Bambu has the right to exercise any of the remedies outlined in the franchise agreement in the event of such a default. The FDD does not specify exactly what remedies Bambu might pursue, but it typically includes the right to terminate the franchise agreement.
This clause highlights the importance of maintaining financial stability as a Bambu franchisee. If a franchisee is struggling financially and considering assigning assets for the benefit of creditors, it could jeopardize their franchise agreement with Bambu.