What happens if there is a material change in the terms of a proposed Bambu franchise transfer?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee grants to Bambu a 30-day right of first refusal to purchase such rights, interest or assets on the same terms and conditions as are contained in the written notice set forth in Section 17.2.d; provided, however, the following additional terms and conditions shall apply:
a. the right of first refusal will be effective for each proposed transfer and any material change in the terms or conditions of the proposed transfer shall be deemed a separate offer on which Bambu shall have a new 30-day right of first refusal;
b. the 30-day right of first refusal period will run concurrently with the period in which Bambu has to approve or disapprove the proposed transferee; and
c. if the consideration or manner of payment offered by a proposed transferee is such that Bambu may not reasonably be required to furnish the same, then Bambu may purchase the interest which is proposed to be sold for the reasonable cash equivalent.
If the parties cannot agree within a reasonable time on the cash consideration, such fair market value will be determined by three independent appraisers who collectively will conduct one appraisal.
Bambu will appoint one appraiser, Franchisee will appoint one appraiser and those appraisers will appoint the third appraiser.
Bambu and Franchisee will select their respective appraisers within 15 days after Bambu notifies Franchisee that Bambu is exercising the right of first refusal under this Section 17.4.
The two appraisers will appoint the third appraiser within 15 days after the date on which the last of the appointed appraisers is appointed.
Bambu and Franchisee will each bear the cost of their own appraiser and share equally the fees and expenses of the third appraiser.
Bambu and Franchisee will instruct the three appraisers to complete the appraisal within 30 days after the third
appraiser's appointment. If Bambu chooses not to exercise its right of first refusal, Franchisee shall be free to complete the transfer subject to compliance with Sections 17.2 and 17.3 under the terms and conditions of the proposal transfer.
Source: Item 23 — Receipts (FDD pages 52–209)
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, if there is a material change in the terms or conditions of a proposed franchise transfer, it is treated as a separate offer, granting Bambu a new 30-day right of first refusal. This means that even if Bambu had initially declined to exercise its right of first refusal on the original terms, a change in those terms restarts the clock, giving Bambu another opportunity to purchase the franchise under the revised conditions.
This provision protects Bambu's interests by ensuring they have the chance to reassess any transfer if the deal changes significantly. For a franchisee looking to sell, this means that any renegotiation of the sale terms with a potential buyer could delay the transfer process by another 30 days, as Bambu has to re-evaluate the new offer. The 30-day right of first refusal period runs concurrently with the period in which Bambu has to approve or disapprove the proposed transferee.
Furthermore, if the consideration or payment method offered by the proposed transferee is not something Bambu can reasonably match, Bambu has the option to purchase the franchise interest for a reasonable cash equivalent. If Bambu and the franchisee cannot agree on the cash consideration, a fair market value will be determined by three independent appraisers. Bambu will appoint one appraiser, the franchisee will appoint another, and those two appraisers will appoint the third. Bambu and the franchisee will each bear the cost of their own appraiser and share equally the fees and expenses of the third appraiser. The appraisers are instructed to complete the appraisal within 30 days after the third appraiser's appointment.
This appraisal process ensures a fair valuation if Bambu decides to exercise its right of first refusal based on a cash equivalent. Franchisees should be aware of these conditions, as they can influence the timeline and financial outcome of a potential transfer. Bambu's consent to one transfer does not constitute consent or approval to any subsequent transfer.