What happens if a Bambu franchisee fails to execute any additional Franchise Agreements?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
The parties agree that a separate Franchise Agreement shall be executed by the parties to this MUD Agreement for each shoppe to be developed under this MUD Agreement. Franchisee will exercise its right for development of each shoppe by giving Bambu written notice of its intention to develop such shoppe at least 90 days in advance of the deadline set forth in the Development Schedule for executing each applicable Franchise Agreement. The Franchise Agreement for the second and subsequent shoppes will be executed by the deadline set forth in the Development Schedule. Franchisee's failure to execute any additional Franchise Agreements or its default in any term of such Franchise Agreements may, at the option of Bambu, be deemed a default under this MUD Agreement and shall entitle Bambu to terminate this MUD Agreement as further provided in Article 4 below.
Source: Item 23 — Receipts (FDD pages 52–209)
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, if a franchisee fails to execute any additional Franchise Agreements under a Multi-Unit Development (MUD) Agreement, Bambu has the option to consider it a default of the MUD Agreement, which could lead to termination of the MUD Agreement.
Specifically, Bambu may terminate the MUD Agreement if the franchisee fails to meet the development schedule outlined in the agreement. However, if the MUD Agreement is terminated solely due to failure to meet the development schedule, any existing Franchise Agreements in effect remain valid. In this case, any clauses in the existing Franchise Agreements that contradict this, including cross-default and cross-termination provisions, will not apply.
However, if the MUD Agreement is terminated due to any other default, Bambu has the option to terminate all Franchise Agreements executed under the MUD Agreement, as well as any other agreements between Bambu and the franchisee or its affiliates. Upon termination or expiration of the MUD Agreement, the franchisee is not entitled to a refund of any fees paid and remains subject to non-disclosure and non-compete obligations outlined in the MUD Agreement and any Franchise Agreements that remain in effect.