If a Bambu franchisee breaches the post-termination non-compete agreement, when does the two-year period restart?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
21.2 Post-Termination Covenant Not to Compete. Upon termination or expiration of this Agreement for any reason, Franchisee and its officers, directors, shareholders, members, managers and/or partners agree that, for a period of two years commencing on the effective date of termination or expiration, or the date on which Franchisee ceases to conduct business, whichever is later, neither Franchisee nor its officers, directors, shareholders, members, managers and/or partners shall have any direct or indirect interest (through a member of any immediate family of Franchisee or its owners or otherwise) as a disclosed or beneficial owner, investor, partner, director, officer, member, employee, consultant, representative or agent or in any other capacity in any Competitive Business, defined in Section 21.1 above, located or operating within a 10 mile radius of the Franchised Location, within 10 miles of any other franchised Bambū shoppe or, within 10 miles of any company or affiliate owned Bambū shoppe. If Franchisee or any of the affiliated parties breaches this Section, the two-year period shall start on the date that such person is enjoined from competing or stops competing, whichever is later. Franchisee and its officers, directors, shareholders,
Source: Item 23 — Receipts (FDD pages 52–209)
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, if a franchisee or any affiliated parties breach the post-termination covenant not to compete, the two-year non-compete period restarts. The two-year period will begin on the date that the person is legally stopped from competing, or when they actually stop competing, whichever occurs later.
This means that if a former Bambu franchisee violates the non-compete agreement by engaging in a competitive business within the restricted area and time, the original two-year restriction is not simply paused. Instead, a new two-year period begins either when a court orders them to cease the competitive activity (is enjoined) or when they voluntarily stop the activity, providing Bambu with continued protection.
This clause protects Bambu by ensuring that franchisees cannot simply violate the non-compete agreement for a period and then claim the original term has expired. The restart provision ensures that Bambu receives the full benefit of the two-year non-compete period, starting from the point when the franchisee is no longer engaging in competitive activities. Prospective franchisees should be aware of this clause and understand the implications of violating the non-compete agreement after the franchise agreement ends.