Does the Bambu franchise agreement specify what constitutes 'materially and unfavorably affect' in the context of criminal convictions?

According to the 2025 Bambu Franchise Disclosure Document, the franchise agreement does not specifically define what constitutes 'materially and unfavorably affect' in the context of a criminal conviction. Instead, it grants Bambu the sole discretion to determine if a crime or offense committed by the franchisee, its owners, managing members, or Bambu Certified Team Leaders is reasonably likely to have such an effect on the Bambu system, Marks, goodwill, or reputation. This determination is subjective and made by Bambu.

This clause gives Bambu broad authority to terminate the franchise agreement if any of the aforementioned parties are convicted of a felony, a crime involving moral turpitude, or any crime that Bambu believes could negatively impact the franchise. The lack of a precise definition creates uncertainty for the franchisee, as it is difficult to predict what specific actions or convictions Bambu might consider detrimental.

For a prospective franchisee, this means that any criminal conviction of themselves or their key personnel could potentially lead to termination of the franchise agreement, depending on Bambu's assessment. It is important to understand that Bambu has the final say in this determination, and there may be limited recourse if a franchisee disagrees with Bambu's decision. A prospective franchisee should seek clarification from Bambu regarding what types of convictions would be considered to 'materially and unfavorably affect' the Bambu system.