What constitutes a 'transfer' of a Bambu franchise according to the franchise agreement?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
As used in this Agreement, the term "transfer" shall mean and include the voluntary, involuntary, direct or indirect assignment, sale, gift or other disposition by Franchisee (or any of its owners) of any interest in: (1) this Agreement; (2) the ownership of Franchisee; or (3) the shoppe or any assets of the shoppe.
The term "transfer" shall also mean and include any change in Franchisee resulting from a divorce, insolvency, corporate or partnership dissolution proceeding, merger, change of control, those transfers described in Section 17.5, by operation of law or, in the event of the death of Franchisee, or an owner of Franchisee by will, declaration of or transfer in trust or under the laws of intestate succession.
Source: Item 23 — Receipts (FDD pages 52–209)
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, a 'transfer' encompasses a broad range of actions related to the franchise agreement, ownership, or assets of the shoppe. Specifically, the term includes any voluntary, involuntary, direct, or indirect assignment, sale, gift, or other disposition by the franchisee (or any of its owners) of any interest in the franchise agreement itself, the ownership of the franchisee entity, or the Bambu shoppe and its assets. This definition ensures that any change in control or ownership is subject to Bambu's review and approval.
This broad definition has significant implications for prospective franchisees. It means that any change in the ownership structure of the franchisee entity, even if it doesn't involve a direct sale of the franchise, could be considered a transfer. For example, if a franchisee is a partnership and a partner leaves or a new partner is added, that could trigger the transfer provisions of the franchise agreement. Similarly, events like divorce, insolvency, or death can also trigger transfer requirements.
Bambu's franchise agreement also stipulates specific preconditions that a franchisee must meet before any transfer can be approved. These include ensuring the shoppe has been open for at least 30 days, obtaining Bambu's written consent, settling all outstanding payments to Bambu and its affiliates, and ensuring the proposed transferee completes the required training program. Additionally, the transferee must execute Bambu's current form of Franchise Agreement, which may have different terms than the original agreement. Meeting these preconditions is crucial for a smooth transfer process.
Furthermore, Bambu retains a right of first refusal in the event of any proposed sale, transfer, or assignment of the franchise rights or related assets. This means that before a franchisee can sell to a third party, they must first offer Bambu the opportunity to purchase the rights or assets on the same terms and conditions. This provision allows Bambu to maintain control over who enters the franchise system and ensures that any new franchisee meets their standards.