Does the definition of 'transfer' for a Bambu franchise include changes resulting from a change of control?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
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, the term "transfer" includes changes resulting from a change of control. This definition is important because it outlines the various scenarios that Bambu considers to be a transfer of the franchise, which then triggers certain requirements and restrictions as detailed in the franchise agreement.
Specifically, the inclusion of "change of control" in the definition means that if the ownership or control of the franchisee entity changes, even without a direct sale or assignment of the franchise agreement, it will be treated as a transfer. This could occur, for example, if the franchisee is a corporation and a majority of its stock is sold to a new owner.
This provision gives Bambu the right to approve or reject such changes in control, ensuring that any new controlling party meets their standards and qualifications. The franchisee must comply with the transfer provisions outlined in Article 17 of the franchise agreement, including obtaining Bambu's written consent, paying any outstanding amounts, ensuring the transferee completes the training program, and executing a new franchise agreement. This level of control is typical in franchising, as franchisors want to maintain standards and protect their brand by carefully vetting anyone who takes over a franchise location.