If the Bambu MUD Agreement is terminated, is the Franchisee entitled to a refund of fees paid?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
as defined in the Franchise Agreements executed hereunder will remain in effect for the term of the Franchise Agreements, unless sooner terminated.
- 4.2. Termination by Franchisee. This MUD Agreement may be terminated by Franchisee for any reason upon 60 days prior written notice to all parties, provided that Franchisee will not be entitled to a refund of any fees paid hereunder under any circumstances.
- 4.3. Termination by Bambu. Franchisee shall be deemed in default and this MUD Agreement may be terminated by Bambu, at its option, in the following circumstances:
- (i) Franchisee defaults on any term or condition of this MUD Agreement, including without limitation, the failure to open and maintain the number of shoppes required by the Development Schedule, and fails to cure such default after 30 days written notice to Franchisee;
Source: Item 23 — Receipts (FDD pages 52–209)
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, under a MUD (Multi-Unit Development) Agreement, a franchisee is generally not entitled to a refund of fees if the agreement is terminated. Specifically, if the MUD Agreement is terminated by the franchisee for any reason, they will not receive a refund of any fees paid. Similarly, if Bambu terminates the MUD Agreement due to the franchisee's default, no refunds will be provided. This policy applies regardless of the reason for termination.
Furthermore, the Bambu FDD states that all fees paid under the MUD Agreement are nonrefundable once paid to Bambu. The franchisee will not be entitled to any refund, return, or rebate of any portion of initial franchise fees paid. The Development Fee compensates Bambu for granting development rights and reserving a Development Area, and Bambu is considered to have fully earned this fee upon receipt.
This non-refundability clause is a significant consideration for prospective Bambu multi-unit franchisees. It means that if the franchisee fails to meet development schedules or defaults on other terms of the MUD Agreement, they risk losing all fees paid without recourse. Franchisees should carefully evaluate their ability to meet the obligations of the MUD Agreement before entering into it, as early termination can result in a substantial financial loss.