Can a Bambu franchisee divert employees from another Bambu franchisee to a Competitive Business during the term of the agreement?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
effort and money which went into its compilation, but from the usage of the same by all the franchisees of Bambu using the Marks and Bambū system. Therefore, other than the Bambū shoppe licensed herein or authorized by separate agreement with Bambu, neither Franchisee nor any of Franchisee's officers, directors, shareholders, members, managers or partners, nor any member of his or their immediate families, shall during the term of this Agreement:
- a. have any direct or indirect controlling interest as a disclosed or beneficial owner in a "Competitive Business" as defined below;
- b. perform services as a director, officer, manager, employee, consultant, representative, agent or otherwise for a Competitive Business; or
- c. divert or attempt to divert any business related to, or any customer or account of the Bambū shoppe, Bambu's business or any other Bambū franchisee's business, by direct inducement or otherwise, or divert or attempt to divert the employment of any employee of Bambu or another franchisee licensed by Bambu to use the Marks and Bambū system, to any Competitive Business by any direct inducement or otherwise.
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.
Source: Item 23 — Receipts (FDD pages 52–209)
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, during the term of the Franchise Agreement, a franchisee is restricted from diverting or attempting to divert the employment of any employee of Bambu or another franchisee licensed by Bambu to use the Marks and Bambū system, to any Competitive Business by any direct inducement or otherwise. A Competitive Business is defined as any business operating, or any business 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.
This restriction is in place because Bambu licenses commercially valuable information to its franchisees, including operations, marketing, and advertising information. The value of this information comes from the time, effort, and money invested in its creation and from its use by all Bambu franchisees. Therefore, Bambu aims to protect its system and the interests of its franchisees by preventing the diversion of employees to competing businesses.
However, there is an exception for franchisees operating in Minnesota. Minnesota Statutes Section 181.991 prohibits a franchisor from restricting, restraining, or prohibiting in any way a franchisee from soliciting or hiring an employee of the franchisor or an employee of a franchisee of the same franchisor. Any such restrictions in Section 21.1.c are hereby deemed deleted for franchisees in Minnesota. This means that if a Bambu franchise is located in Minnesota, the franchisee is not restricted from soliciting or hiring employees from other Bambu franchises, even for a Competitive Business.