What happens if a Bambu franchisee signs a MUD Agreement?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
Under the terms of the MUD Agreement, we grant to you the right to establish, according to a schedule, a set number of Bambū shoppes that you and we agree upon within a larger geographical territory ("Development Area"). A Development Area is usually defined by street boundaries, city, county or state limits or by other reasonable boundaries. The number of Bambū shoppes to be developed may be adjusted depending on demographics and other characteristics of a Development Area, including population density, income and other characteristics of the surrounding area, natural boundaries, extent of competition and whether the proposed Development Area is urban, suburban or rural in nature. You do not have a right of first refusal or similar contractual right to acquire additional Bambū franchises in contiguous areas. Except as described below, we may not establish or franchise any other person or entity to establish Bambū shoppes using the Marks and Bambū system within the Development Area for so long as the MUD Agreement is in effect. However, nothing in the MUD Agreement prevents, prohibits, or otherwise restricts at any time the operation of any Bambū shoppes in the Development Area which are operated under any existing franchise agreements, or the grant of successor franchise rights related to those existing franchise agreements.
The continuation of your right to your Development Area during the term of the MUD Agreement is dependent on you meeting the Development Schedule in the agreement. The Development Schedule requires you to open and continuously operate at least a certain number of Bambū shoppes in the Development Area by certain deadlines. Failure to meet the Development Schedule may result in the termination of your development rights. The termination of your MUD Agreement solely for a failure to meet the Development Schedule will not terminate or affect your rights or obligations under any franchise agreements entered into between you and us prior to the date of termination of the MUD Agreement. Each shoppe opened under a MUD Agreement is subject to the terms and conditions of the franchise agreement entered into for that shoppe as discussed above. You do not receive an exclusive territory under the MUD Agreement. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control.
We, our affiliates and successors retain the following rights, among others, without payment of compensation to you, under the Franchise Agreement and MUD Agreement:
- To use and to license others to use, the Marks and Bambū system in connection with the operation of a Bambū shoppe, at any location other than the Protected Area and, if applicable, within your Development Area;
To use the Marks to identify any type of products and services, promotional and marketing efforts or related items, and to identify products and services distributed or otherwise made available through alternative channels of distribution (other than Bambū shoppes), at any location, including sales through channels such as retail or wholesale distribution, Internet marketing and distribution, social media marketing, mail order, catalog, retail store display, or made-to-order or pre-packaged product sales in grocery stores;
To use and license the use of different proprietary marks or methods (for example, if we acquire or are acquired by another business that provides products and services similar to or the same as a shoppe) in connection with the sale of products and services similar to or the same as those which you sell, whether in alternative channels of distribution or through owning, developing, operating or franchising stores which are the same as, or similar to, or different from Bambū shoppes, at any location, and on any terms and conditions as we determine, although we have no present plans to do so;
To use and to license others to use the Marks and Bambū system to establish restaurants similar to Bambū shoppes that service walkup and drive-thru customers but without indoor seating (a "Drive-thru shoppe"), at any location, including in your Protected Area and, if applicable, in your Development Area; provided that if we desire to open or permit someone else to open a Drive-thru shoppe in your Protected Area or Development Area, we will give you a right of first refusal to participate in the Drive-thru shoppe with either partial or whole ownership thereof;
Source: Item 12 — (FDD pages 38–40)
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, a MUD Agreement, or Multi-Unit Development Agreement, grants a franchisee the right to establish a pre-agreed number of Bambu shoppes within a larger geographical territory called a Development Area, according to a set schedule. The Development Area's boundaries are typically defined by streets, city, county, or state limits. The number of Bambu shoppes required may be adjusted based on demographics and characteristics of the Development Area, including population density, income, competition, and whether the area is urban, suburban, or rural.
The continuation of the franchisee's rights to the Development Area is contingent upon meeting the Development Schedule outlined in the MUD Agreement, which requires opening and continuously operating a certain number of Bambu shoppes by specific deadlines. Failure to meet this schedule may result in the termination of the franchisee's development rights. However, the termination of the MUD Agreement for failing to meet the Development Schedule does not affect the franchisee's rights or obligations under any existing franchise agreements entered into before the termination date of the MUD Agreement. Each shoppe opened under a MUD Agreement is subject to the terms and conditions of the franchise agreement for that specific location.
It is important to note that even with a MUD Agreement, a Bambu franchisee does not receive an exclusive territory and may face competition from other franchisees, company-owned outlets, or other channels of distribution or competitive brands controlled by Bambu. Bambu retains the right to use and license others to use the Bambu system at any location outside the Protected Area and, if applicable, within the Development Area. They can also use the Marks to identify any type of products and services through alternative channels of distribution. Bambu also retains the right to establish restaurants similar to Bambu shoppes that service walkup and drive-thru customers but without indoor seating (a "Drive-thru shoppe"), at any location, including in your Protected Area and, if applicable, in your Development Area; provided that if they desire to open or permit someone else to open a Drive-thru shoppe in your Protected Area or Development Area, they will give you a right of first refusal to participate in the Drive-thru shoppe with either partial or whole ownership thereof.