Does the definition of 'transfer' for a Bambu franchise include changes resulting from divorce?
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 definition of "transfer" includes changes resulting from divorce. This means that if a franchisee's ownership changes due to a divorce, it is considered a transfer under the franchise agreement.
This has significant implications for a franchisee going through a divorce. The franchisee will need to comply with the transfer provisions outlined in the franchise agreement. This typically involves obtaining Bambu's consent, which will not be unreasonably withheld, and potentially executing a new franchise agreement. The transferee, whether it's the original franchisee or their former spouse, may also need to complete the training program.
Furthermore, the transfer is subject to certain preconditions, such as paying all outstanding amounts owed to Bambu and ensuring the proposed transferee meets Bambu's criteria for franchisees. Bambu also retains the right to impose reasonable conditions on the franchisee and the transferee during the transfer process. This is a fairly standard clause in franchise agreements, as franchisors want to maintain control over who operates their franchises and ensure brand consistency.
In the event of a divorce, a Bambu franchisee should carefully review the transfer provisions in their franchise agreement and communicate with Bambu to understand the specific requirements and procedures for transferring ownership. Failing to comply with these provisions could result in a breach of the franchise agreement.