What happens if a Bambu franchisee fails to comply with the insurance provisions outlined in the franchise agreement?

According to Bambu's 2025 Franchise Disclosure Document, failing to maintain the required insurance coverage constitutes a breach of the franchise agreement. While the document does not explicitly detail the consequences of failing to maintain insurance, it does state that Bambu has the right to terminate the agreement if a franchisee breaches any provision and fails to cure the default within 30 days of written notice. This suggests that if a Bambu franchisee fails to maintain the insurance coverage as specified in the FRC Materials or other writings provided by Bambu, they would be in breach of the agreement.

Bambu is required to provide a 30-day written notice to the franchisee to cure the default. If the franchisee does not obtain and maintain the required insurance within this 30-day period, Bambu has the right to terminate the franchise agreement. This could result in the franchisee losing their rights to operate the Bambu shop, as well as any investments made in the business.

It is important for prospective Bambu franchisees to carefully review the insurance requirements outlined in the FRC Materials and the franchise agreement. Franchisees should ensure they understand the types and limits of coverage required, as well as the process for adding Bambu as an additional insured on their policies. Maintaining adequate insurance coverage is a critical aspect of complying with the franchise agreement and protecting the franchisee's investment.

Furthermore, the FDD states that Bambu has the right to change the types of insurance required. This means that franchisees must stay informed of any changes to the insurance requirements and ensure their coverage remains compliant throughout the term of the franchise agreement. Failure to do so could result in a breach of contract and potential termination of the franchise.