During the term of the Bambu franchise, what activities are prohibited regarding competing businesses, customers, or employees?

According to Bambu's 2025 Franchise Disclosure Document, during the term of the franchise agreement, franchisees are prohibited from involvement in any competing business. Additionally, franchisees are not allowed to divert customers or employees away from Bambu. This restriction is detailed in Section 21.1 of the Franchise Agreement and Section 6.1 of the Multi-Unit Development Agreement.

This non-competition covenant during the franchise term is a standard practice in franchising. It aims to protect Bambu's market share, customer base, and workforce by preventing franchisees from using the franchisor's confidential information and business model to benefit a competing venture. The restriction on diverting customers ensures that franchisees focus on growing the Bambu business rather than poaching clients for other businesses they may be involved in. Similarly, the restriction on diverting employees prevents franchisees from recruiting staff to work for competing businesses, which could disrupt the operation of the Bambu franchise.

Prospective franchisees should carefully review Sections 21.1 and 6.1 of the Franchise Agreement and Multi-Unit Development Agreement, respectively, to fully understand the scope and limitations of these non-competition covenants. Understanding these restrictions is crucial for franchisees to avoid any actions that could be considered a breach of contract, which could lead to termination of the franchise agreement and other penalties.