Does the Bambu franchise agreement allow Bambu to terminate the agreement if a Principal commits a crime that unfavorably affects the Bambu system?

According to Bambu's 2025 Franchise Disclosure Document, Bambu has the right to terminate the franchise agreement if a Principal is convicted of certain crimes. A Principal includes the franchisee, any owners, managing members, or Bambu Certified Team Leaders.

Specifically, Bambu can terminate the agreement if a Principal is convicted of a felony, a crime involving moral turpitude, or any crime or offense that is reasonably likely to materially and unfavorably affect the Bambu system, Marks, goodwill, or reputation. This provision gives Bambu broad discretion to terminate the agreement based on a criminal conviction of someone involved in the franchise.

This clause is fairly standard in franchise agreements, as franchisors want to protect their brand's reputation. However, the subjective nature of what constitutes a crime that could "materially and unfavorably affect the Bambu system" means a franchisee could face termination even if the crime seems unrelated to the business. A prospective franchisee should carefully consider this clause and seek legal advice to understand their rights and obligations.