What happens if a Bambu franchisee fails to execute the then-current Franchise Agreement or pay the Successor Franchise Fee?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
18.5 Conditions of Refusal. Bambu shall not be obligated to offer Franchisee a successor franchise upon the expiration of this Agreement if Franchisee fails to comply with any of the above conditions for acquiring successor franchise rights. In such event (except for failure to execute the then current Franchise Agreement or pay the Successor Franchise Fee), Bambu shall give Franchisee notice of expiration at least 180 days prior to the expiration of the term, and such notice shall set forth the reasons for such refusal to offer successor franchise rights. Upon the expiration of this Agreement, Franchisee shall comply with the provisions of Section 19.4 below.
Source: Item 23 — Receipts (FDD pages 52–209)
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, a franchisee's failure to execute the then-current Franchise Agreement or pay the Successor Franchise Fee results in Bambu not being obligated to offer a successor franchise upon the expiration of the current agreement. In most other cases where Bambu decides not to offer a successor franchise, Bambu must provide the franchisee with 180 days' notice prior to the expiration of the term, including the reasons for refusal.
This means that if a Bambu franchisee wants to renew their franchise agreement, they must sign the current franchise agreement and pay the successor franchise fee. Failure to do so gives Bambu the right to deny the renewal without the standard 180-day notice. This places the onus on the franchisee to meet these obligations to ensure the continuation of their franchise.
This condition is significant for prospective franchisees as it highlights the importance of financial readiness and adherence to the franchisor's requirements for renewal. Franchisees should be prepared to meet these obligations to avoid the risk of losing their franchise at the end of the term. It is common in franchising for franchisors to require franchisees to update their agreements and pay a fee for renewal, reflecting the current standards and costs of the franchise system.