Does Bambu have the right to withhold consent for a franchise transfer?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
eement at any time upon notice to Franchisee, provided that Bambu has fulfilled its obligations hereunder or has made adequate provisions therefor.
- 5.2. Assignment by Franchisee. Because the rights granted herein are personal to Franchisee, Franchisee shall not transfer, assign or convey this MUD Agreement or any interest hereunder without Bambu's prior written consent which consent shall not be unreasonably withheld if Franchisee complies with the transfer provisions of the Franchise Agreement most recently executed by Bambu and Franchisee, which provisions shall be deemed to be incorporated herein by reference. Bambu reserves the right to require the transferee to sign the then-current form of MUD Agreement with materially different terms and conditions that may be negotiated between the parties depending on the circumstances of the transfer. Franchisee is prohibited from granting a subfranchise hereunder. As used in this MUD Agreement, the term "transfer" shall have the meaning set forth in the Franchise Agreement most recently signed by Bambu and Franchisee. In addition to any conditions contained in this MUD Agreement, the conditions for Bambu's approval of any transfer shall be the same as the conditions contained in the Franchise Agreement most recently executed by Bambu and Franchisee, which provisions shall be deemed to be incorporated herein by reference.
- 5.3. Transfer Fee. In the event of any proposed sale, transfer or assignment by Franchisee as described herein, Franchisee or the proposed transferee shall pay to Bambu the standard transfer fee for each franchise to be transferred, as governed by the applicable Franchise Agreement executed pursuant to this MUD Agreement, plus $7,500 for every undeveloped franchise right for which no Franchise Agreement has been executed.
5.4. Bambu Right of First Refusal. In the event of any proposed sale, transfer or assignment of its rights under this MUD Agreement or any interest in it or all or any part of the franchise development rights, or assets directly or indirectly related to the franchise development rights, Franchisee agrees to grant Bambu a 30-day right of first refusal to purchase such rights or assets on the same terms and conditions as are contained in the initial Franchise Agreement executed hereunder.
6. RESTRICTIVE COVENANTS
6.1. Restrictive Covenants. During the term and after the termination of this MUD Agreement or any Franchise Agreement signed in furtherance of this MUD Agreement, Franchisee and its Approved Affiliates and their officers, partners, directors, managers, agents or employees who have completed Bambu's training programs or had access to the Resource Center Materials, as described in the Franchise Agreement, or the beneficial owners of a five percent or greater interest in Franchisee or an Approved Affiliate and their respective immediate families, shall be subject to all restrictive covenants as set forth in the Franchise Agreement executed concurrently herewith, and in any nondisclosure and noncompetition agreements executed by Franchisee, its Approved Affiliates, or their employees, owners, managers, members, partners, officers, directors, agents or representatives, which covenants by this reference are incorporated herein.
7. BUSINESS RELATIONSHIPS
- 7.1. Independent Contractor. During the term of this MUD Agreement, Franchisee shall be an independent contractor and shall in no way be considered as an agent, partner or employee of Bambu. It is understood and agreed that no agency or partnership is created by this MUD Agreement. As such, Franchisee has no authority of any nature whatsoever to bind Bambu or incur any liability for or on behalf of Bambu or to represent itself as anything other than an independent contractor.
- 7.2. Indemnification.
Source: Item 23 — Receipts (FDD pages 52–209)
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, a franchisee cannot transfer their rights under the Franchise Agreement without Bambu's prior written consent. However, Bambu's consent cannot be unreasonably withheld if the franchisee complies with the transfer provisions outlined in the most recently executed Franchise Agreement.
Bambu may impose reasonable conditions on the franchisee and the potential transferee before approving any transfer, in addition to the conditions listed in Section 17.2 of the agreement. The term "transfer" includes any voluntary, involuntary, direct, or indirect assignment, sale, gift, or other disposition of any interest in the Franchise Agreement, the ownership of the franchisee, or the shoppe and its assets.
Furthermore, Bambu has the right to approve or disapprove a proposed sale or transfer. This right applies if the franchisee is a partnership or business association, involving the addition or deletion of partners or the transfer of partnership interests. It also applies if the franchisee is a corporation or LLC, concerning any transfer of 15% or more of the ownership interests. If the franchisee is an individual, the transfer to a corporation controlled by them is also subject to Bambu's approval, conditioned on the individual's continuing personal guarantee, a limitation on the corporation's business activity to operating the Bambu shoppe, and other reasonable conditions.
Bambu also retains a 30-day right of first refusal to purchase the franchisee's rights or assets on the same terms and conditions as the proposed transfer. If Bambu chooses not to exercise this right, the franchisee can proceed with the transfer, provided they comply with Sections 17.2 and 17.3 of the Franchise Agreement.