If an Associate breaches the post-termination covenant not to compete for a Bambu franchise, when does the two-year period start?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
If Associate or any member of Associate's immediate family breaches this Section, then the two-year period under this Section shall start on the date that Associate or its family member, as applicable, is enjoined from such activity or ceases such activity, whichever is later.
Source: Item 23 — Receipts (FDD pages 52–209)
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, if an Associate or their family member breaches the post-termination covenant not to compete, the two-year non-compete period will begin on the later of two dates: the date the Associate is legally stopped (enjoined) from the competitive activity, or the date they actually cease the competitive activity.
This means that simply starting a competitive business doesn't automatically trigger the non-compete clock. Bambu must take legal action to stop the Associate, or the Associate must voluntarily stop the competing activity. Only then does the two-year period begin. This clause protects Bambu's interests by ensuring that the non-compete period effectively prevents competition for a full two years after the Associate stops competing.
For a prospective Bambu franchisee, this clause highlights the importance of understanding the restrictions of the non-compete agreement. If an Associate violates the non-compete, they may face legal action from Bambu to enforce the agreement. The start date of the two-year period is tied to the resolution of that potential legal action or the voluntary cessation of the competitive behavior. Therefore, it is crucial to fully understand what constitutes a "Competitive Business" and the geographic scope of the non-compete to avoid unintentionally triggering this clause.