Does the designation of a Designated Area for a Bambu franchise grant any continuing territorial rights?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
If you execute your Franchise Agreement before you select and we approve a site, we will designate a "Designated Area" within which you must find a Franchised Location. The designation of the Designated Area does not in any manner grant to you any continuing territorial rights in or to the Designated Area.
Your Franchise Agreement designates a geographic area ("Protected Area") in which we will not establish and operate, or franchise anyone else to establish and operate, other Bambū shoppes, except as described below. The Protected Area may be defined by a radius around the shoppe, zip code boundaries, street boundaries or similar designations. The placement of a shoppe and the designation of a Protected Area by us depends on various demographic and market conditions around a proposed Franchised Location, including density of population, number of competitors and other food uses in the market, site availability, traffic, access and growth potential.
Source: Item 12 — (FDD pages 38–40)
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, the designation of a Designated Area does not grant any continuing territorial rights to the franchisee. If a franchisee executes the Franchise Agreement before selecting and receiving approval for a site, Bambu will designate a Designated Area within which the franchisee must find an approved Franchised Location. However, this designation does not provide any ongoing territorial rights.
Bambu does offer a Protected Area, which is a geographic area where Bambu will not establish or franchise another to establish a Bambu location. The Protected Area's size and configuration depend on demographic and market conditions. These conditions include population density, the number of competitors, site availability, traffic, access, and growth potential. The Protected Area may be defined by a radius around the shoppe, zip code boundaries, or street boundaries.
Bambu also offers a Development Area under a MUD Agreement, which grants the right to establish a set number of Bambu shoppes within a larger geographical territory according to an agreed-upon schedule. The continuation of rights to the Development Area is dependent on meeting the Development Schedule, which requires opening and continuously operating a certain number of Bambu shoppes by specific deadlines. Failure to meet the Development Schedule may result in the termination of development rights. It is important to note that franchisees do not receive an exclusive territory under the MUD Agreement and may face competition from other franchisees, company-owned outlets, or other channels of distribution.