If a Bambu franchisee's owner is convicted of a felony, can Bambu terminate the agreement?

According to Bambu's 2025 Franchise Disclosure Document, Bambu has the right to terminate the franchise agreement if the franchisee, or any of its owners, managing members, or Bambu Certified Team Leaders (collectively "Principals"), is convicted of a felony. This also applies to a crime involving moral turpitude, or any crime or offense that is reasonably likely, in the sole opinion of Bambu, to materially and unfavorably affect the Bambu system, Marks, goodwill, or reputation thereof. This termination is effective immediately upon notice to the franchisee.

This provision gives Bambu broad discretion to terminate the agreement based on a criminal conviction of the franchisee or its principals. The standard for what constitutes a crime that could "materially and unfavorably affect" the Bambu system is subjective and determined solely by Bambu. This means that even if a conviction is not directly related to the operation of the franchise, Bambu could still use it as grounds for termination.

For a prospective franchisee, this clause highlights the importance of maintaining a clean criminal record, not only for themselves but also for any owners, managing members, and certified team leaders associated with the franchise. A criminal conviction, even for something seemingly unrelated to the business, could jeopardize the franchise agreement and result in its termination. Franchisees should carefully consider this risk and ensure that all individuals involved in the franchise operation understand the potential consequences of a criminal conviction.