In the lawsuit with Sweet Delights, what did Bambu allege as the reason for terminating the Plaintiff's franchise agreement?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
TION
Concluded Proceedings Involving Us
Sweet Delights by cLc, LLC, d/b/a BAMBU Mays Landing v. Bambu Franchising, LLC and Sadia & Nadia, LLC d/b/a BAMBU Atlantic City, Case No. ATL-C-34-22, in the Superior Court of New Jersey, Chancery Division – General Equity for the County of Atlantic, State of New Jersey. On June 8, 2022, Sweet Delights by cLc, LLC (the "Plaintiff"), a franchisee of ours, filed its Verified Complaint against us and Sadia & Nadia, LLC d/b/a BAMBU Atlantic City, another franchisee of ours (the "Defendant Franchisee"). The Defendant Franchisee was subsequently dismissed from the action, the action was transferred to the Superior Court of New Jersey, Law Division, Atlantic County under Case No. ATL-L-707-23, and the Plaintiff filed an Amended Complaint against us. Plaintiff alleged we granted it an exclusive territory that included all of Atlantic County, New Jersey, including Atlantic City, and that we subsequently granted a franchise to the Defendant Franchisee for a location in Atlantic City. We denied all claims and brought counterclaims asserting that the Plaintiff's franchise agreement was terminated because the franchisee closed down one of its shoppes without our consent. The parties entered into a Settlement Agreement pursuant to which the parties agreed that the Plaintiff's franchise agreement would remain in effect, but with no extension or renewal rights and with a redefined Protected Area. We also agreed to accrue the delinquent monthly marketing fees the Plaintiff then owed to us until the termination or expiration of Plaintiff's franchise agreement, with a percentage of those fees to be waived if certain conditions are met. Also, if the Plaintiff transferred its franchise, we would provide certain transfer assistance, a reduction in the transfer fee and other benefits to the Plaintiff, and if a transfer occurred by a certain date, we agreed to pay the Plaintiff $30,000 one year following the date of the tra
Source: Item 3 — Litigation (FDD pages 12–13)
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, Bambu alleged that the franchise agreement with Sweet Delights was terminated because the franchisee closed one of its stores without Bambu's consent. This information comes from a description of concluded legal proceedings involving Bambu.
The lawsuit, filed by Sweet Delights by cLc, LLC, against Bambu Franchising, LLC, and another franchisee, Sadia & Nadia, LLC d/b/a BAMBU Atlantic City, initially involved claims of an exclusive territory violation. Sweet Delights alleged that Bambu improperly granted a franchise to Sadia & Nadia, LLC, for a location within Sweet Delights' exclusive territory in Atlantic County, New Jersey. Bambu denied these claims and counterclaimed, asserting the termination was due to the unauthorized closure of a Sweet Delights location.
The parties eventually reached a settlement where the franchise agreement remained in effect, but without extension or renewal rights, and with a redefined protected area. Bambu also agreed to accrue delinquent monthly marketing fees owed by Sweet Delights, with a potential waiver of a percentage of those fees if certain conditions were met. Additionally, Bambu agreed to provide transfer assistance, a reduction in the transfer fee, and other benefits if Sweet Delights transferred its franchise, including a payment of $30,000 to Sweet Delights one year following the transfer if it occurred by a specific date. The case was dismissed on May 9, 2024.