What constitutes 'cause' for termination of the Bambu Multi-Unit Development Agreement, and what are the cure periods for defaults?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise Agreement or Multi-Unit Development Agreement | Summary | |
|---|---|---|---|
| (a) | Length of the franchise term | Section 18.1 of Franchise Agreement ("FA"); Section 4.1 of Multi-Unit Development Agreement ("MUDA") | 10 years for the Franchise Agreement. For the MUD Agreement, the term extends until the earlier of the date that you sign the Franchise Agreement for the final Bambū shoppe to be developed under the MUD Agreement or the deadline in the development schedule for signing that Franchise Agreement. |
| (b) | Renewal or extension of the term | Sections 18.3 and 18.4 of FA | If you meet certain criteria, you may acquire successor franchise rights for the term stated in the then current Franchise Agreement. |
| (c) | Requirements for franchisee to renew or extend | Section 18.3 of FA | Provide notice to us, no more than 3 defaults, remodel shoppe, attend additional training, pay fee, sign new agreement and a Successor Franchise Rider in the form attached as Exhibit E containing a release. If you seek to acquire successor franchise rights, you may be required to sign a contract with materially different terms and conditions than your original contract. |
| (d) | Termination by franchisee | Section 4.2 of MUDA | For the Franchise Agreement: Not applicable. For the MUD Agreement: You may terminate for any reason upon 60 days' notice. (Subject to state law.) |
| (e) | Termination by franchisor without cause | Not applicable | Not applicable |
| (f) | Termination by franchisor with cause | Sections 19.1 and 19.2 of FA; Sections 4.3 and 4.4 of MUDA | We can terminate only if you commit any one of several listed violations. |
| (g) | "Cause" defined-curable defaults | Sections 19.1 and 19.2 of FA; Section 4.3 of MUDA | For the Franchise Agreement: 48 hours for misuse of the Marks, purchases from unapproved suppliers, or other failures to comply with FRC Materials or other standards, 5 days for monetary defaults, 7 days for filing of a legal action in violation of the dispute resolution terms in the Franchise Agreement, and generally 30 days for other defaults. For the Development Agreement: 30 days' notice for breach. If we provide you with a notice of default, we and our affiliates may suspend services to you until each default is cured. |
Source: Item 17 — (FDD pages 44–46)
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, the franchisor can terminate the Multi-Unit Development Agreement (MUDA) if the franchisee commits certain violations. The FDD outlines different cure periods for defaults related to the Franchise Agreement versus the Development Agreement. For the Development Agreement, Bambu requires 30 days' notice for a breach. If Bambu provides a notice of default, they and their affiliates may suspend services to the franchisee until the default is resolved.
For the Franchise Agreement, the cure periods are more specific. A franchisee has 48 hours to cure defaults related to misuse of Bambu's Marks, unauthorized purchases from unapproved suppliers, or non-compliance with FRC Materials or other standards. Monetary defaults must be cured within 5 days. If a franchisee files a legal action that violates the dispute resolution terms in the Franchise Agreement, they have 7 days to rectify the situation. For other types of defaults under the Franchise Agreement, the franchisee generally has 30 days to cure the issue.
It is important to note that the FDD also lists non-curable defaults for the Franchise Agreement, which would allow Bambu to terminate the agreement without providing an opportunity to cure the default. These include actions such as unauthorized disclosure, conviction of a crime, abandonment, failure to have Bambu Certified Team Leaders present, unapproved transfers, bankruptcy, assignment for the benefit of creditors, unsatisfied judgments, levy, foreclosure, repeated violations, violating restrictive covenants, issuing two insufficient funds checks, health and safety violations, misrepresentations, sexual harassment or discrimination, breach of other agreements, unenforceability of a guaranty, or becoming subject to the PATRIOT Act. Prospective franchisees should carefully review Sections 4.3 and 4.4 of the MUDA and Sections 19.1 and 19.2 of the Franchise Agreement to fully understand the circumstances that could lead to termination.