Who is subject to the Restrictive Covenants described in Article 21 regarding Bambu?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 23 — Receipts (FDD pages 52–209)
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, the Restrictive Covenants outlined in Article 21 apply to several parties associated with the franchise. These include the franchisee, their approved affiliates, and the officers, partners, directors, managers, agents, or employees of the franchisee or its affiliates who have completed Bambu's training programs or accessed the Resource Center Materials. Additionally, the covenants extend to beneficial owners holding a five percent or greater interest in the franchisee or an approved affiliate, as well as their respective immediate families.
These restrictive covenants are in effect during the term of the MUD Agreement or any Franchise Agreement signed in furtherance of the MUD Agreement. They also remain in force after the termination of these agreements. This means that even after a franchisee exits the Bambu system, they and the other covered parties are still bound by the restrictions.
This broad scope is typical in franchising to protect the brand's confidential information, customer relationships, and market share. Prospective franchisees should carefully review Article 21 and any related non-disclosure or non-competition agreements to fully understand the limitations they and their associates will be under, both during and after the franchise term. It is important to note that these covenants are incorporated by reference, meaning they are detailed in the Franchise Agreement itself and any other executed non-disclosure and non-competition agreements.