If a modification to the Bambu Franchise Agreement is approved by a Super-Majority, can Bambu make it effective for all franchisees?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
This Agreement may be modified by Bambu at its option whenever Bambu and a Super-Majority, as hereinafter defined, of franchisees and licensees of Bambu agree to any such modification.
A "Super-Majority" of Bambu franchisees or licensees shall consist of the owners of at least 75 percent of all Bambū shoppe franchises and licenses, or, if only a portion of Bambū shoppes are affected by the modification, at least 75 percent of those Bambū shoppe franchises and licenses affected by the modification.
Whenever a modification is approved by a Super-Majority, Bambu may elect to treat the modification as effective to all franchisees and licensees or the applicable group thereof, including Franchisee, to the same extent and in the same manner as if the modification was unanimously approved by them, and regardless of whether Franchisee may or may not desire to be bound by the modification.
Bambu shall provide Franchisee with notice of any modification to this Agreement based on a Super-Majority approval at least 30 days prior to the date such modification is to be effective.
By signing this Agreement, Franchisee appoints the officers of Bambu as its attorneys in fact with irrevocable power and authority to execute any such modification so approved.
Source: Item 23 — Receipts (FDD pages 52–209)
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, the Franchise Agreement can be modified under certain conditions. Bambu can modify the agreement with a written agreement between Bambu and the franchisee or with notice of approval from a Super-Majority of franchisees. A "Super-Majority" is defined as owners of at least 75% of all Bambu shoppe franchises and licenses. If the modification only affects a portion of the shoppes, then a Super-Majority consists of at least 75% of those affected franchises and licenses.
If a modification is approved by a Super-Majority, Bambu has the option to make the modification effective for all franchisees, regardless of whether an individual franchisee desires to be bound by it. Bambu must provide franchisees with a 30-day notice before the modification takes effect. By signing the Franchise Agreement, the franchisee appoints the officers of Bambu as their attorneys in fact with the power to execute any modification approved by a Super-Majority.
This clause has significant implications for prospective franchisees. Even if a franchisee disagrees with a proposed change, if at least 75% of franchisees agree to it, Bambu can implement the change across the entire system. This highlights the importance of understanding the views and potential influence of other franchisees within the Bambu system. It also means that franchisees give up some individual control over the terms of their agreement in exchange for being part of the franchise system.
It is fairly common in franchising for agreements to include provisions allowing modifications based on a majority vote of franchisees, as this allows the franchise system to adapt to changing market conditions or address systemic issues. However, the specific percentage required for a "Super-Majority" can vary. Prospective franchisees should carefully consider this aspect and discuss with existing franchisees how such modifications have been handled in the past and what impact they had on their businesses.