What is the definition of the 'Protected Area' for a Bambu franchise, according to the FDD?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
Subject to Bambu's reservation of rights described in Section 3.4 below, Bambu shall not establish and operate, or franchise another person or entity to establish and operate, a Bambū shoppe within the geographic area described in Attachment I, attached hereto (the "Protected Area").
However, nothing in this Agreement restricts any Bambu-owned or franchised Bambū shoppes from advertising in, or soliciting customers from, Franchisee's Protected Area.
Franchisee does not have exclusive rights to the customers in its Protected Area.
Source: Item 23 — Receipts (FDD pages 52–209)
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, the Protected Area for a franchisee is defined geographically in Attachment I of the franchise agreement. Within this area, Bambu agrees not to establish or franchise another entity to operate a Bambū shoppe, subject to certain reservations of rights. This means that while a franchisee is granted a specific territory, Bambu retains some control and can still impact the franchisee's business.
However, the FDD specifies that having a Protected Area does not grant the franchisee exclusive rights to the customers within that area. Existing or future Bambu locations, whether company-owned or franchised, are not restricted from advertising or soliciting customers within the franchisee's Protected Area. This implies that franchisees may face competition from other Bambu outlets even within their defined territory.
Bambu also retains the right to use the Marks and Bambū system outside the Protected Area and can license others to do so. Furthermore, Bambu can establish restaurants similar to Bambū shoppes that service walk-up and drive-thru customers but without indoor seating (a "Drive-thru shoppe") within the franchisee's Protected Area, provided they offer the franchisee a right of first refusal to participate in the Drive-thru shoppe with either partial or whole ownership. These reservations of rights are significant for prospective franchisees to consider, as they highlight the limitations of the Protected Area and the potential for competition from both within and outside the Bambu franchise system.