Does the definition of 'transfer' for a Bambu franchise include changes resulting from a merger?
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 in the franchisee resulting from a merger. This means that if a Bambu franchisee's business undergoes a merger with another entity, it is considered a transfer under the franchise agreement. This triggers certain requirements and restrictions outlined in the agreement.
Specifically, Bambu's consent is required for such a transfer. The franchisee must also ensure that all outstanding payments to Bambu and its affiliates are settled and that they are in full compliance with the franchise agreement. The proposed transferee, which would be the merged entity, must also complete Bambu's training program. A new franchise agreement may need to be executed, potentially with different terms than the original agreement.
Furthermore, Bambu requires written notice 30 days before the proposed effective date of the transfer, including detailed information about the terms and conditions of the merger and a written offer from the proposed transferee. This allows Bambu to evaluate the proposed transfer and ensure that the new entity meets its standards for franchisees.
This provision is typical in franchise agreements, as franchisors want to maintain control over who operates their branded businesses. By defining a merger as a transfer, Bambu ensures it has the right to approve any changes in ownership or control of a franchise, protecting the brand and the interests of other franchisees.