What is a 'MUD Agreement' in relation to acquiring additional Bambu franchises?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
Under the terms of the MUD Agreement, we grant to you the right to establish, according to a schedule, a set number of Bambū shoppes that you and we agree upon within a larger geographical territory ("Development Area"). A Development Area is usually defined by street boundaries, city, county or state limits or by other reasonable boundaries. The number of Bambū shoppes to be developed may be adjusted depending on demographics and other characteristics of a Development Area, including population density, income and other characteristics of the surrounding area, natural boundaries, extent of competition and whether the proposed Development Area is urban, suburban or rural in nature. You do not have a right of first refusal or similar contractual right to acquire additional Bambū franchises in contiguous areas. Except as described below, we may not establish or franchise any other person or entity to establish Bambū shoppes using the Marks and Bambū system within the Development Area for so long as the MUD Agreement is in effect. However, nothing in the MUD Agreement prevents, prohibits, or otherwise restricts at any time the operation of any Bambū shoppes in the Development Area which are operated under any existing franchise agreements, or the grant of successor franchise rights related to those existing franchise agreements.
The continuation of your right to your Development Area during the term of the MUD Agreement is dependent on you meeting the Development Schedule in the agreement. The Development Schedule requires you to open and continuously operate at least a certain number of Bambū shoppes in the Development Area by certain deadlines. Failure to meet the Development Schedule may result in the termination of your development rights. The termination of your MUD Agreement solely for a failure to meet the Development Schedule will not terminate or affect your rights or obligations under any franchise agreements entered into between you and us prior to the date of termination of the MUD Agreement. Each shoppe opened under a MUD Agreement is subject to the terms and conditions of the franchise agreement entered into for that shoppe as discussed above. You do not receive an exclusive territory under the MUD Agreement. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control.
Source: Item 12 — (FDD pages 38–40)
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, a MUD Agreement, or Multi-Unit Development Agreement, grants a franchisee the right to establish a pre-determined number of Bambu shoppes within a specific geographical area, referred to as the "Development Area", according to an agreed-upon schedule. The Development Area's boundaries are typically defined by streets, city, county, or state limits, or other reasonable boundaries. The number of Bambu stores required may be adjusted based on factors such as demographics, population density, income levels, competition, and the area's nature (urban, suburban, or rural).
Under a MUD Agreement, Bambu agrees not to establish or franchise any other entity to establish Bambu shoppes within the Development Area while the agreement is in effect. However, this restriction does not apply to existing franchise agreements or the granting of successor franchise rights related to those agreements. It's important to note that franchisees do not have a right of first refusal to acquire additional Bambu franchises in contiguous areas.
The continuation of the franchisee's rights to the Development Area is contingent upon meeting the Development Schedule outlined in the MUD Agreement, which requires opening and continuously operating a certain number of Bambu shoppes by specific deadlines. Failure to meet this schedule may result in the termination of the development rights, but it will not affect any existing franchise agreements. Each shoppe opened under a MUD Agreement is subject to the terms and conditions of its individual franchise agreement. It is important to note that even with a MUD Agreement, franchisees do not receive an exclusive territory and may face competition from other franchisees, company-owned outlets, or other channels of distribution.