What constitutes a default by the Franchisee that could lead to termination of the Bambu MUD Agreement?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
prior written notice to all parties, provided that Franchisee will not be entitled to a refund of any fees paid hereunder under any circumstances.
- 4.3. Termination by Bambu. Franchisee shall be deemed in default and this MUD Agreement may be terminated by Bambu, at its option, in the following circumstances:
- (i) Franchisee defaults on any term or condition of this MUD Agreement, including without limitation, the failure to open and maintain the number of shoppes required by the Development Schedule, and fails to cure such default after 30 days written notice to Franchisee; or
- (ii) Franchisee is in default under any of the Franchise Agreements executed in furtherance of this MUD Agreement or any other agreement between Bambu or any of Bambu's
affiliates and Franchisee or any of Franchisee's affiliates and fails to cure such default within the time periods specified in such other agreements.
- 4.4. Continued Effectiveness of Franchise Agreements. If this MUD Agreement is terminated due solely to a failure by Franchisee to meet the Development Schedule, Bambu and Franchisee agree that such termination shall not constitute a default or result in a termination of any Franchise Agreements executed between Franchisee and Bambu in effect as of the date of termination of this MUD Agreement. In that case, those Franchise Agreements shall continue in full force and effect notwithstanding the termination of this MUD Agreement. Bambu and Franchisee agree that any statements to the contrary in the Franchise Agreements executed by them, including any cross-default and cross-termination provisions, will be inapplicable in the situation of a termination of this MUD Agreement based solely on Franchisee's failure to meet the Development Schedule. If this MUD Agreement is terminated due to any other default under Section 4.3 above, all Franchise Agreements executed in furtherance of this MUD Agreement and all other agreements between Bambu and Franchisee or any of Franchisee's affiliates may, at Bambu's sole option, be terminated.
- 4.5. Post-Termination Obligations.
Source: Item 23 — Receipts (FDD pages 52–209)
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, several circumstances can lead to the termination of the MUD (Multi-Unit Development) Agreement by Bambu due to franchisee default. These include defaulting on any term or condition of the MUD Agreement, such as failing to open and maintain the required number of stores as per the Development Schedule, and not curing the default within 30 days of written notice.
Additionally, a franchisee may be in default if they default under any Franchise Agreements executed in furtherance of the MUD Agreement or any other agreement between Bambu (or its affiliates) and the franchisee (or their affiliates), and fail to cure the default within the time periods specified in those agreements.
Furthermore, the FDD specifies cross-default provisions, meaning a default by the franchisee under the MUD Agreement is considered a default under all agreements between the franchisee (or affiliated companies) and Bambu (or affiliated companies), and vice versa. A default by any guarantor of the agreement also constitutes a default of the MUD Agreement. Bambu retains the option to terminate any or all other agreements if the MUD Agreement is terminated due to franchisee default, and an incurable or uncured default can lead to termination of any agreement without additional notice or opportunity to cure.
These terms are fairly standard in franchising, as franchisors need to ensure multi-unit developers meet their development obligations and maintain compliance across all agreements. Prospective Bambu franchisees should carefully review these default and termination provisions with legal counsel to understand their obligations and the potential consequences of non-compliance.