What constitutes 'compliance' with the Bambu Franchise Agreement for the purpose of acquiring successor franchise rights?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
- b.
Has complied with all provisions of this Agreement during the current term, including the payment on a timely basis of all franchise fees, Royalty Fees, Marketing and Technology Fees, inventory purchases, and other fees due hereunder. "Compliance" shall mean, at a minimum, that Franchisee has not received any written notification from Bambu of breach hereunder more than 3 times during the term hereof.
- c.
Upgrades and/or remodels the Bambū shoppe and its operations at Franchisee's sole expense (the necessity of which shall be in the sole discretion of Bambu) to conform with the then current FRC Materials including, without limitation, shoppe facility and trade dress standards, or at the option of Franchisee, secure a substitute premises approved by Bambu and developed by Franchisee according to the Bambū system then applicable for Bambū shoppes.
- d.
You, your Bambū Certified Team Leaders and such other persons that Bambu may require, attend and successfully complete any additional training imposed by Bambu.
- e.
Executes a successor franchise rider in the form designated by Bambu which contains a general release of any and all claims against Bambu and its affiliates, and their respective officers, directors, employees and agents arising out of or relating to this Agreement.
- f.
Pays a successor franchise fee ("Successor Franchise Fee") to Bambu concurrently with the execution of the successor franchise agreement in the amount set forth in Attachment I.
- 18.4 Exercise of Option for Successor Franchise.
Franchisee may exercise its option for a successor franchise by giving written notice of such exercise to Bambu not more than 270 nor less than 180 days prior to the scheduled expiration of this Agreement.
Franchisee's successor franchise rights shall become effective by signing the Franchise Agreement then currently being offered to new franchisees of Bambu.
Source: Item 23 — Receipts (FDD pages 52–209)
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, a franchisee's compliance with the existing Franchise Agreement is a key factor in determining whether they will be offered a successor franchise. To be considered compliant, the franchisee must adhere to all provisions of the current agreement throughout its term. This includes making timely payments for all franchise fees, Royalty Fees, Marketing and Technology Fees, and inventory purchases, as well as any other fees due under the agreement.
However, the definition of "compliance" allows for a limited number of breaches. Specifically, a franchisee is still considered compliant if they have not received more than three written notifications from Bambu regarding breaches of the agreement during its term. This suggests that minor or quickly resolved issues will not necessarily disqualify a franchisee from obtaining a successor franchise.
In addition to general compliance, the franchisee must also upgrade or remodel the Bambu shop to meet the current standards, or secure a substitute premises approved by Bambu. The franchisee, their Bambu Certified Team Leaders, and other required personnel must attend and successfully complete any additional training imposed by Bambu. The franchisee must also execute a successor franchise rider that includes a general release of claims against Bambu and pay a successor franchise fee, the amount of which is detailed in Attachment I of the Franchise Disclosure Document. Meeting all of these conditions, alongside signing the new Franchise Agreement, allows the franchisee to exercise their successor franchise rights.