What is a 'Protected Area' in the context of a Bambu franchise?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
the Designated Area does not in any manner grant to you any continuing territorial rights in or to the Designated Area.
Your Franchise Agreement designates a geographic area ("Protected Area") in which we will not establish and operate, or franchise anyone else to establish and operate, other Bambū shoppes, except as described below. The Protected Area may be defined by a radius around the shoppe, zip code boundaries, street boundaries or similar designations. The placement of a shoppe and the designation of a Protected Area by us depends on various demographic and market conditions around a proposed Franchised Location, including density of population, number of competitors and other food uses in the market, site availability, traffic, access and growth potential.
The designation of your Franchised Location, Protected Area or, if applicable, Development Area, does not grant you the exclusive right to any particular market or customers. You may advertise your Bambū shoppe in any geographic area and you may serve all customers who enter your shoppe, subject to reasonable restrictions and policies as we may place on your activities which may include restrictions and policies regarding: (1) electronic advertising (including Internet advertising); (2) the content, methods, media and means used to advertise, market and promote your shoppe; and (3) limitations on advertising, marketing or conducting business in areas outside of your Protected Area. Other Bambū franchisees have the same rights to conduct advertising anywhere and provide programs and products to all persons who enter their shoppes, subject to any restrictions set forth in our FRC Materials. You may not use other channels of distribution such as the Internet, catalog sales, telemarketing or other direct marketing to make sales outside of your Protected Area without our prior written consent.
You may not change the location of your Franchised Location or your Protected Area without our written consent before making the change. Upon our approval of your new location, you must also pay us a relocation fee of $15,000. We will base our approval of your new location on the same variety of factors as your initial proposed Franchised Location. Upon payment of the relocation fee, we will provide you similar new Bambū shoppe operations support, including two site visits and three days of additional training support as determined by us. If you close your existing Bambū shoppe while you are relocating it, you will continue to be responsible for Royalty Fee payments during the closure period, although we will waive the Marketing and Technology Fee until your relocated Bambū shoppe has opened. Unless you sign a MUD Agreement, described below, and except as described below related to Drive-thru shoppes (defined below) in your Protected Area, you have no option, right of first refusal or similar contractual right to acquire additional Bambū franchises. We reserve the right, in our sole discretion, to offer an existing franchisee the first right to purchase an additional franchise in the market area adjacent to that served by the franchisee's existing Franchised Location. Continuation of your rights to the Protected Area is not dependent on achieving a certain sales volume, market penetration or other contingency.
You will not receive an exclusive territory. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control.
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 Protected Area is a geographic region designated in the Franchise Agreement where Bambu will not establish or franchise others to establish another Bambu location. The Protected Area's boundaries can be defined in various ways, such as a radius around the store, zip code boundaries, or street boundaries. The placement of a Bambu store and the designation of its Protected Area depend on demographic and market conditions around the proposed franchise location, including population density, the number of competitors, other food businesses in the area, site availability, traffic, access, and growth potential.
However, it's important to note that this Protected Area is subject to certain exceptions. Bambu retains the right to use and license the Bambu system at locations outside the Protected Area. They can also use the Marks to identify products and services through alternative channels of distribution, such as internet marketing, social media, and retail distribution, regardless of location. Bambu also retains the right to establish restaurants similar to Bambu stores that service walk-up and drive-thru customers but without indoor seating (Drive-thru shoppe), including in your Protected Area. In this case, Bambu will offer the franchisee a right of first refusal to participate in the Drive-thru shoppe with either partial or whole ownership.
Furthermore, Bambu can establish shoppes at Institutional Facilities, such as parks, stadiums, airports, department stores, educational facilities, and hospitals, even within a franchisee's Protected Area. The designation of a Protected Area does not grant the franchisee exclusive rights to any particular market or customers. Franchisees can advertise their Bambu store in any geographic area and serve all customers who enter their store, subject to reasonable restrictions and policies. The franchisee may not use other channels of distribution such as the Internet, catalog sales, telemarketing or other direct marketing to make sales outside of their Protected Area without Bambu's prior written consent.
Prospective franchisees should be aware that they do not receive an exclusive territory and may face competition from other franchisees, company-owned outlets, or other channels of distribution or competitive brands that Bambu controls. The continuation of rights to the Protected Area is not dependent on achieving a certain sales volume, market penetration or other contingency. A franchisee may not change the location of their Franchised Location or their Protected Area without written consent from Bambu, and doing so requires paying a relocation fee of $15,000.