Does the definition of 'transfer' for a Bambu franchise include transfers by will?
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' does include transfers by will. Specifically, the FDD states that the definition of 'transfer' includes events resulting from the death of the franchisee or an owner of the franchisee by will. This means that if a franchisee or owner dies and their interest in the Bambu franchise is transferred through a will, it is considered a transfer under the franchise agreement.
This has significant implications for prospective franchisees. It means that the franchisee's heirs or beneficiaries will need to meet Bambu's requirements for transfer, including approval by Bambu. The executor or representative of the deceased franchisee must transfer the franchise interest to a third party approved by Bambu within 180 days of the death or permanent disability. Failure to do so constitutes a breach of the agreement.
Bambu maintains some control over who ultimately operates the franchise, even in the event of death. The brand aims to ensure that any new owner meets their standards and is capable of running the business effectively. This is a common provision in franchise agreements to protect the brand and the interests of other franchisees. The 180-day window provides a reasonable timeframe for the estate to handle the transfer while minimizing disruption to the business.
Prospective franchisees should carefully consider these transfer provisions and discuss them with their legal and financial advisors. It is important to have a plan in place for the continuation of the business in the event of death or disability to ensure a smooth transition and avoid potential breaches of the franchise agreement.