Does the Bambu franchise agreement specify what constitutes a 'substantial portion of the assets' in the context of unauthorized transfer?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee shall not transfer its rights under this Agreement or any interest in it, or any part or portion of any business entity that owns it or all or a substantial portion of the assets of the Bambū shoppe, unless: (1) the shoppe has already opened for business and has been operating for at least 30 days; and (2) Franchisee obtains Bambu's written consent and complies with all of the following requirements:
Source: Item 23 — Receipts (FDD pages 52–209)
What This Means (2025 FDD)
The 2025 Bambu Franchise Disclosure Document does not explicitly define what constitutes a 'substantial portion of the assets' in the context of an unauthorized transfer. However, the FDD does state that a franchisee cannot transfer 'all or a substantial portion of the assets of the Bambū shoppe' without meeting certain preconditions, including obtaining Bambu's written consent.
Because the term 'substantial portion' is not defined, there is ambiguity regarding what level of asset transfer would trigger the restrictions outlined in the franchise agreement. This lack of clarity could lead to disputes between Bambu and its franchisees if a disagreement arises over whether a particular transfer required franchisor approval.
A prospective Bambu franchisee should seek clarification from Bambu regarding the definition of 'substantial portion of the assets' to fully understand the limitations on their ability to transfer assets. It would be prudent to request specific examples or a percentage threshold that Bambu considers 'substantial' to avoid potential future conflicts.