If any other agreement between Bambu and the franchisee is terminated due to the franchisee's default, can Bambu terminate the Bambu franchise agreement?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
24.16 Cross-Default and Cross Termination Provisions.
- a. A default by Franchisee under this Agreement will be deemed a default of all agreements between Franchisee and/or any company(ies) affiliated with Franchisee, on the one hand, and Bambu and/or any company(ies) affiliated with Bambu, on the other hand (the "Other Agreements"). A default by Franchisee and/or any company(ies) affiliated with Franchisee under any of the Other Agreements will be deemed a default under this Agreement. A default by any guarantor(s) of this Agreement or of any of the Other Agreements will be deemed a default of this Agreement.
- b. If this Agreement is terminated as a result of a default by Franchisee, Bambu may, at its option, elect to terminate any or all of the Other Agreements. If any of the Other Agreements is terminated as a result of a default by Franchisee and/or any company(ies) affiliated with Franchisee, Bambu may, at its option, elect to terminate this Agreement. It is agreed that an incurable or uncured default under this Agreement or any of the Other Agreements will be grounds for termination of this Agreement and/or any and all of the Other Agreements without additional notice or opportunity to cure.
Source: Item 23 — Receipts (FDD pages 52–209)
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, a default by a franchisee under any other agreement with Bambu or its affiliates can trigger the termination of the Bambu franchise agreement. Specifically, if the franchisee or any affiliated company defaults on any agreement with Bambu or its affiliates, it will be considered a default under the franchise agreement.
Bambu has the option to terminate any or all other agreements if the franchise agreement is terminated due to the franchisee's default. Conversely, if any of these other agreements are terminated because of a default by the franchisee or an affiliated company, Bambu can choose to terminate the franchise agreement.
This cross-default and cross-termination provision means that any failure to meet obligations in one agreement can have serious repercussions for all agreements in place with Bambu. This clause underscores the importance of franchisees meeting all contractual obligations to Bambu and its affiliates to avoid potential termination of their franchise agreement.
It is important to note that an incurable or uncured default under the franchise agreement or any other agreement provides grounds for termination of the franchise agreement and/or any and all of the other agreements without additional notice or opportunity to cure. This means that some defaults may lead to immediate termination without a chance to rectify the issue, which could have significant financial and operational consequences for the franchisee.