After the Bambu franchise agreement terminates, for how long is the franchisee restricted from engaging in a Competitive Business?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
The term "Competitive Business" as used in this Agreement shall mean any business operating, or granting franchises or licenses to others to operate, a retail or wholesale business deriving more than 10 percent of its gross receipts from preparation of or sale of teas, fruit dessert drinks, coffee, or other products now or in the future offered or sold by Bambū shoppes. Notwithstanding the foregoing, Franchisee shall not be prohibited from owning securities in a Competitive Business if such securities are listed on a stock exchange or traded on the over-the-counter market and represent 5 percent or less of that class of securities issued and outstanding.
The term "immediate family" as used in this Article 21 shall mean and include any spouse, domestic partner, children, parents or siblings.
21.2 Post-Termination Covenant Not to Compete. Upon termination or expiration of this Agreement for any reason, Franchisee and its officers, directors, shareholders, members, managers and/or partners agree that, for a period of two years commencing on the effective date of termination or expiration, or the date on which Franchisee ceases to conduct business, whichever is later, neither Franchisee nor its officers, directors, shareholders, members, managers and/or partners shall have any direct or indirect interest (through a member of any immediate family of Franchisee or its owners or otherwise) as a disclosed or beneficial owner, investor, partner, director, officer, member, employee, consultant, representative or agent or in any other capacity in any Competitive Business, defined in Section 21.1 above, located or operating within a 10 mile radius of the Franchised Location, within 10 miles of any other franchised Bambū shoppe or, within 10 miles of any company or affiliate owned Bambū shoppe. If Franchisee or any of the affiliated parties breaches this Section, the two-year period shall start on the date that such person is enjoined from competing or stops competing, whichever is later. Franchisee and its officers, directors, shareholders,
Source: Item 23 — Receipts (FDD pages 52–209)
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, a franchisee is restricted from involvement in a Competitive Business for two years after the termination or expiration of the franchise agreement. This restriction begins either on the effective date of termination or expiration, or the date the franchisee ceases business operations, whichever occurs later.
The term "Competitive Business" refers to any business that derives more than 10% of its gross receipts from the preparation or sale of teas, fruit dessert drinks, coffee, or other products that Bambu shops currently or may offer in the future. This restriction applies to the franchisee, their officers, directors, shareholders, members, managers, and partners. It prevents them from holding any direct or indirect interest in a Competitive Business within a 10-mile radius of the former franchised location, any other franchised Bambu shop, or any company-owned Bambu shop.
If a franchisee or affiliated party breaches this non-compete clause, the two-year restriction period will restart from the date they are either legally stopped from competing or when they voluntarily cease the competitive activity, whichever is later. This post-termination covenant not to compete is designed to protect Bambu's market and proprietary information by preventing former franchisees from directly competing using the knowledge and experience gained during their time with the franchise.