What constitutes a violation of restrictive covenants that could lead to termination of the Bambu franchise agreement?

According to Bambu's 2025 Franchise Disclosure Document, a franchisee's intentional or negligent violation of the restrictive covenants described in Article 21 can lead to the termination of the franchise agreement. This applies not only to the franchisee but also to their affiliates, principals, or any individual subject to these restrictive covenants.

Article 21 outlines specific non-compete restrictions during the term of the agreement. Franchisees (including their officers, directors, shareholders, members, managers, partners, and their immediate families) are prohibited from having a direct or indirect controlling interest in a Competitive Business, performing services for a Competitive Business, or diverting business or employees from the Bambu shoppe, Bambu's business, or any other Bambu franchisee's business. A "Competitive Business" is not defined in this excerpt.

These restrictions are designed to protect Bambu's commercially valuable information and the Bambu system. The FDD also states that Bambu can require the franchisee's officers, directors, partners, shareholders, members, managers, employees with access to confidential information, and their immediate family members to sign a Nondisclosure and Noncompetition Agreement. Franchisees must provide Bambu with copies of these agreements. Franchisees also agree not to make statements that would disparage Bambu or its system.