What section of the Bambu Franchise Agreement outlines the franchisee's obligations on termination or non-renewal?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise Agreement or Multi-Unit Development Agreement | Summary | |
|---|---|---|---|
| (h) | "Cause" defined-non-curable defaults | Section 19.1 of FA | For the Franchise Agreement: Unauthorized disclosure, conviction of a crime, abandonment, no Bambū Certified Team Leaders are present at or available to be at the Bambū shoppe for three consecutive days, unapproved transfers, bankruptcy 1 , assignment for benefit of creditors, unsatisfied judgments, levy, foreclosure, repeated violations, violate restrictive covenants, two insufficient funds checks, health and safety, misrepresentations, sexual harassment or discrimination, breach of other agreements between us or any of our affiliates and you or any of your affiliates, guaranty becomes unenforceable or inadequate, you become subject to the PATRIOT Act. |
| (i) | Franchisee's obligations on termination/non-renewal | Sections 19.3 and 19.4 of FA; Section 4.5 of MUDA | Pay outstanding amounts; pay an amount equal to the monthly Royalty Fees due over the remaining term under the Franchise Agreement if terminated due to your default; de-identification of shoppe; return of confidential information; covenant not to compete (see also o. and r. below); others. |
Source: Item 17 — (FDD pages 44–46)
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, Item 17 outlines the franchisee's obligations upon termination or non-renewal of the Franchise Agreement. Specifically, Sections 19.3 and 19.4 of the Franchise Agreement, as well as Section 4.5 of the Multi-Unit Development Agreement, detail these obligations.
The Bambu franchisee's obligations include several key actions. First, the franchisee must pay all outstanding amounts owed to Bambu. If the termination is due to the franchisee's default, they must also pay an amount equal to the monthly Royalty Fees due for the remaining term of the Franchise Agreement. This could represent a significant financial obligation.
Additionally, the franchisee is required to de-identify the shoppe, removing all Bambu branding and signage. They must also return all confidential information to Bambu. Furthermore, the franchisee is subject to a covenant not to compete, which restricts their ability to engage in similar businesses (further details are found in sections o. and r. of Item 17). These post-termination obligations are typical in franchise agreements to protect the franchisor's brand and market position.
In summary, a Bambu franchisee should carefully review Sections 19.3 and 19.4 of the Franchise Agreement and Section 4.5 of the Multi-Unit Development Agreement to fully understand their responsibilities upon termination or non-renewal. These sections cover financial obligations, de-identification requirements, return of confidential information, and non-compete restrictions, all of which can significantly impact the franchisee's future business activities.