What is the geographic radius within which the Associate is prohibited from engaging in a Competitive Business after termination of a Bambu franchise?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
Associate covenants and agrees that, for a period of two years after the earlier of (i) the effective date of termination or expiration of Associate's Affiliation with Franchisee or Bambu, or (ii) the effective date of termination or expiration of the Franchisee's Franchise Agreement, neither Associate, nor any member of Associate's immediate family, shall have any direct or indirect interest as a disclosed or a beneficial owner, investor, partner, director, officer, manager, employee, consultant, representative or agent or in any other capacity in any Competitive Business located or operating within a 10 mile radius of the Franchised Location, as defined in the Franchise Agreement governing the Franchised Business, or within 10 miles of any Bambū shoppe owned by Franchisee or an affiliate of Franchisee, or within 10 miles of any other franchised or licensed Bambū shoppe.
If Associate or any member of Associate's immediate family breaches this Section, then the two-year period under this Section shall start on the date that Associate or its family member, as applicable, is enjoined from such activity or ceases such activity, whichever is later.
Associate expressly acknowledges that he or she possesses business and career skills and abilities of a general nature and has other opportunities for exploiting such skills and abilities.
Consequently, enforcement of this covenant will not deprive Associate of his or her personal goodwill or ability to earn a living.
Source: Item 23 — Receipts (FDD pages 52–209)
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, an Associate is subject to a post-termination covenant not to compete. This covenant restricts the Associate from having any direct or indirect interest in a Competitive Business within a 10-mile radius of several locations. These locations include the Franchised Location, any Bambu shoppe owned by the Franchisee or its affiliates, and any other franchised or licensed Bambu shoppe. This restriction applies for a period of two years following the termination or expiration of the Associate's affiliation with the Franchisee or Bambu, or the termination or expiration of the Franchisee's Franchise Agreement, whichever comes first.
The FDD defines a "Competitive Business" as any business that operates a retail or wholesale establishment deriving 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 or sold by Bambu shoppes. However, the Associate is not prohibited from owning securities in a Competitive Business if those securities are listed on a stock exchange or traded over-the-counter and represent 5 percent or less of the outstanding securities.
If the Associate or any member of their immediate family breaches this non-compete agreement, the two-year restriction period will restart from the date the Associate is legally stopped from competing or voluntarily ceases the competitive activity, whichever is later. The agreement acknowledges that the Associate possesses general business and career skills and has other opportunities to earn a living, suggesting that the enforcement of this covenant will not deprive the Associate of their personal goodwill or ability to earn a living.
This non-compete clause is a significant restriction for Associates, as it limits their ability to work in similar businesses within a defined geographic area for a specified period after their affiliation with Bambu ends. Prospective Associates should carefully consider the implications of this covenant, especially if they have experience or interest in similar businesses. They should also be aware of the conditions under which the non-compete period could be extended due to a breach of the agreement.