Who remains liable for obligations to Bambu that arose before the transfer date of a Bambu franchise?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
- j.
The transferor shall remain liable for all of the obligations to Bambu in connection with the shoppe that arose prior to the effective date of the transfer, and any covenants that survive the termination or expiration of this Agreement, and shall execute any and all instruments reasonably requested by Bambu to evidence such liability.
Source: Item 23 — Receipts (FDD pages 52–209)
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, if a franchisee transfers their franchise to a new owner, the original franchisee remains liable to Bambu for all obligations connected to the shop that arose before the transfer's effective date. This includes any covenants that survive the termination or expiration of the Franchise Agreement. The original franchisee must also execute any documents that Bambu reasonably requests to confirm this liability.
This provision protects Bambu by ensuring that the company can still recover any outstanding debts or enforce obligations that the original franchisee incurred. It also means that a franchisee cannot escape their financial responsibilities to Bambu simply by selling the franchise.
For a prospective Bambu franchisee, this clause highlights the importance of fulfilling all financial and contractual obligations before considering a transfer. Failure to do so could result in continued liability even after the franchise is sold. It is also important to understand which obligations survive termination, as the franchisee will remain liable for those even after the transfer.