Is a Bambu franchisee prohibited from being a consultant for a Competitive Business during the term of the agreement?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
ainst it. This indemnity shall continue in full force and effect subsequent to and notwithstanding the expiration or termination of this Agreement.
21. RESTRICTIVE COVENANTS
- 21.1 Non-Competition During Term. Franchisee acknowledges that, in addition to the license of the Marks hereunder, Bambu has also licensed commercially valuable information which comprises and is a part of the Bambū system, including without limitation, operations, marketing, advertising and related information and materials and that the value of this information derives not only from the time, 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.
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 performing services as a consultant for a Competitive Business. A Competitive Business is defined as any business operating a retail or wholesale business that derives more than 10 percent of its gross receipts from the preparation or sale of teas, fruit dessert drinks, coffee, or other products currently or in the future offered by Bambu shops. This restriction applies not only to the franchisee but also to the franchisee's officers, directors, shareholders, members, managers, partners, and their immediate families.
This non-compete clause ensures that franchisees and related parties do not directly contribute to competing businesses that could undermine Bambu's market position. The restriction extends to various roles, including director, officer, manager, employee, consultant, representative, or agent, preventing franchisees from leveraging their knowledge and resources gained from the Bambu franchise to benefit a competitor. The FDD specifies that 'immediate families' are also subject to this restriction.
This measure protects Bambu's commercially valuable information and the Bambu system, which includes operations, marketing, and advertising strategies. The value of this information is derived from the collective efforts and investments of all Bambu franchisees. By preventing franchisees from engaging with competing businesses, Bambu aims to maintain the integrity and competitive advantage of its brand and franchise network. This restriction is in place for the duration of the franchise agreement, which is typically a period of 10 years.