In Hawaii, if Bambu terminates or refuses to renew a franchise, what is Bambu obligated to compensate the franchisee for?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
Section 482E-6(3) of the Hawaii Revised Statutes provides that upon termination or refusal to renew the Franchise, Bambu is obligated to compensate Franchisee for the fair market value, at the time of the termination or expiration of the Franchise, of Franchisee's inventory, supplies, equipment and furnishings purchased from Bambu or a Supplier designated by Bambu; provided that personalized materials which have no value to Bambu need not be compensated for. If Bambu refuses to renew a Franchise for the purpose of converting Franchisee's business to one owned and operated by Bambu, Bambu, in addition to the remedies provided above, shall compensate Franchisee for the loss of goodwill. Bambu may deduct from such compensation reasonable costs incurred in removing, transporting and disposing of Franchisee's inventory, supplies, equipment and furnishings pursuant to this requirement, and may offset from such compensation any monies due Bambu.
Source: Item 23 — Receipts (FDD pages 52–209)
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, a Hawaii Rider to the Franchise Agreement specifies compensation terms if Bambu terminates or refuses to renew a franchise. In such cases, Bambu is obligated to compensate the franchisee for the fair market value of the franchisee's inventory, supplies, equipment, and furnishings. This compensation applies to items purchased either from Bambu or from a supplier designated by Bambu.
However, there is an exception: Bambu is not required to compensate for personalized materials that have no value to Bambu. Additionally, if Bambu refuses to renew the franchise with the intention of converting the franchisee's business to one that Bambu owns and operates, Bambu must also compensate the franchisee for the loss of goodwill, in addition to the compensation for inventory, supplies, equipment, and furnishings.
Bambu is allowed to deduct reasonable costs from the compensation amount. These costs may include expenses related to removing, transporting, and disposing of the franchisee's inventory, supplies, equipment, and furnishings. Bambu can also offset any monies that the franchisee owes to Bambu from the compensation amount.