Is a Bambu franchisee allowed to grant a subfranchise under the MUD Agreement?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
- 5.2. Assignment by Franchisee. Because the rights granted herein are personal to Franchisee, Franchisee shall not transfer, assign or convey this MUD Agreement or any interest hereunder without Bambu's prior written consent which consent shall not be unreasonably withheld if Franchisee complies with the transfer provisions of the Franchise Agreement most recently executed by Bambu and Franchisee, which provisions shall be deemed to be incorporated herein by reference. Bambu reserves the right to require the transferee to sign the then-current form of MUD Agreement with materially different terms and conditions that may be negotiated between the parties depending on the circumstances of the transfer. Franchisee is prohibited from granting a subfranchise hereunder. As used in this MUD Agreement, the term "transfer" shall have the meaning set forth in the Franchise Agreement most recently signed by Bambu and Franchisee. In addition to any conditions contained in this MUD Agreement, the conditions for Bambu's approval of any transfer shall be the same as the conditions contained in the Franchise Agreement most recently executed by Bambu and Franchisee, which provisions shall be deemed to be incorporated herein by reference.
Source: Item 23 — Receipts (FDD pages 52–209)
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, a franchisee is explicitly prohibited from granting subfranchises under the MUD (Multi-Unit Development) Agreement. The MUD Agreement outlines the development rights granted to the franchisee, but it does not include the right to license or subfranchise the Bambu system to others. This restriction is in place to ensure that Bambu maintains control over its brand standards and the quality of its franchise operations.
This means that a franchisee cannot authorize another party to operate a Bambu location within their development area. The franchisee themselves must develop and operate all locations as per the agreement. This limitation is a standard practice in franchising, as franchisors typically want to maintain direct control over the brand and operational standards.
This restriction is clearly stated in Section 5.2 of the MUD Agreement, which explicitly prohibits franchisees from granting subfranchises. Any attempt to do so would be a breach of the agreement. Prospective franchisees should be aware of this restriction and factor it into their business planning, as it limits their ability to expand their operations through subfranchising.