What are the de-identification obligations of a Bambu franchisee upon termination or non-renewal of the franchise agreement?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise Agreement or Multi-Unit Development Agreement | Summary | |
|---|---|---|---|
| (i) | Franchisee's obligations on termination/non-renewal | Sections 19.3 and 19.4 of FA; Section 4.5 of MUDA | Pay outstanding amounts; pay an amount equal to the monthly Royalty Fees due over the remaining term under the Franchise Agreement if terminated due to your default; de-identification of shoppe; return of confidential information; covenant not to compete (see also o. and r. below); others. |
Source: Item 17 — (FDD pages 44–46)
What This Means (2025 FDD)
According to the 2025 Bambu Franchise Disclosure Document, upon termination or non-renewal of the Franchise Agreement, a franchisee has specific obligations related to de-identification of the shoppe. This means the franchisee must remove all branding, signage, and other materials that identify the location as a Bambu franchise.
The FDD states that de-identification of the shoppe is one of the requirements after termination or non-renewal. Additionally, franchisees must pay all outstanding amounts owed to Bambu. If the termination is due to the franchisee's default, they must also pay an amount equal to the monthly Royalty Fees due over the remaining term of the Franchise Agreement. Franchisees are also obligated to return any confidential information to Bambu and adhere to a covenant not to compete, which restricts them from engaging in similar businesses within a specified area and timeframe.
These obligations are typical in franchise agreements to protect the brand's integrity and prevent confusion in the marketplace after a franchise ceases operation. Prospective franchisees should carefully review Sections 19.3 and 19.4 of the Franchise Agreement and Section 4.5 of the Multi-Unit Development Agreement, as referenced in Item 17, to fully understand the scope of these post-termination requirements and the potential financial implications.