If the Franchisee terminates the Bambu MUD Agreement, will they receive a refund of any fees paid?

According to Bambu's 2025 Franchise Disclosure Document, if a franchisee terminates the MUD (Multi-Unit Development) Agreement, they will not receive a refund of any fees paid. Specifically, the FDD states that if the MUD Agreement is terminated by the franchisee for any reason, with 60 days prior written notice, the franchisee will not be entitled to a refund of any fees paid. This policy applies regardless of the circumstances leading to the termination.

This means that a prospective Bambu franchisee should carefully consider their decision before entering into a MUD Agreement, as the development fee and initial franchise fees are nonrefundable. These fees are considered earned by Bambu upon receipt, as they represent payment for the grant of development rights and a reserved development area. The franchisee bears the risk of forfeiting these fees if they choose to terminate the agreement, even with advance notice.

This policy is not uncommon in the franchise industry, as initial fees are often used to cover the franchisor's costs associated with setting up the franchise and reserving territory. However, it is crucial for potential franchisees to understand the nonrefundable nature of these fees and to assess their financial capacity and commitment to the franchise before signing the agreement. Franchisees should seek legal and financial advice to fully understand the implications of this policy and to evaluate the risks involved.