Can a Bambu franchisee terminate the Multi-Unit Development Agreement, and if so, under what conditions?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise Agreement or Multi-Unit Development Agreement | Summary | |
|---|---|---|---|
| (d) | Termination by franchisee | Section 4.2 of MUDA | For the Franchise Agreement: Not applicable. For the MUD Agreement: You may terminate for any reason upon 60 days' notice. (Subject to state law.) |
Source: Item 17 — (FDD pages 44–46)
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, a franchisee can terminate the Multi-Unit Development Agreement (MUDA). The FDD outlines the terms and conditions for termination in Item 17. Specifically, the franchisee has the right to terminate the MUDA for any reason, providing they give Bambu 60 days' notice. This ability to terminate is subject to state law, which may impose additional requirements or limitations.
This termination right provides a degree of flexibility for the franchisee. It allows them to exit the development agreement if their circumstances change or if they decide that developing multiple Bambu locations is no longer viable for them. However, it's important to note that termination may have consequences, and the franchisee should carefully review the MUDA to understand any potential liabilities or obligations that survive termination.
It is important to note that the termination conditions for the Franchise Agreement itself are different. The franchisee cannot terminate the Franchise Agreement for any reason, but Bambu can terminate the Franchise Agreement if the franchisee commits any one of several listed violations. Therefore, the ability to terminate applies specifically to the MUDA and not necessarily to the individual franchise agreements that are subsequently signed for each Bambu location developed under the MUDA.
Prospective franchisees should consult with legal counsel to fully understand the implications of terminating the MUDA and how state laws might affect their rights and obligations. They should also carefully consider the potential financial and operational consequences of terminating the agreement before making a decision.