Under what circumstances does a Bambu franchisee desire to transfer the Franchise Agreement?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
The term "transfer" shall also mean and include any change in Franchisee resulting from a divorce, insolvency, corporate or partnership dissolution proceeding, merger, change of control, those transfers described in Section 17.5, by operation of law or, in the event of the death of Franchisee, or an owner of Franchisee by will, declaration of or transfer in trust or under the laws of intestate succession.
- 17.5 Specific Types of Transfers.
Franchisee acknowledges that Bambu's right to approve or disapprove of a proposed sale or transfer, and all other requirements and rights related to such proposed sale or transfer, as provided for above, shall apply (1) if Franchisee is a partnership or other business association, to the addition or deletion of a partner or members of the association or the transfer of any partnership or membership among existing partners or members; (2) if Franchisee is a corporation or limited liability company, to any proposed transfer or assignment of 15 percent or more of the ownership interests of Franchisee, whether such transfer occurs in a single transaction or several transactions and whether such transfer involves then issued and outstanding shares of stock or other ownership interest or newly issued shares or other ownership interest; and (3) if Franchisee is an individual, to the transfer from such individual or individuals to a corporation or other entity controlled by them, in which case Bambu's approval will be conditioned upon: (i) the continuing personal guarantee of the individual (or individuals) for the performance of obligations under this Agreement; (ii) a limitation on the corporation's or other entities' business activity to that of operating the Bambū shoppe and related activities; and (iii) other reasonable conditions.
With respect to a proposed transfer as described in subsection (1) and (3) of this Section, Bambu will waive any transfer fee chargeable to Franchisee for a transfer and the right of first refusal set forth in Section 17.4 under these circumstances.
- 17.7 Franchisee's Death or Disability.
Upon the death or permanent disability of Franchisee (or the individual controlling Franchisee entity), the executor, administrator, conservator, guardian or other personal representative of such person shall transfer Franchisee's interest in this Agreement or such interest in Franchisee entity to a third party approved by Bambu.
Such disposition of this Agreement or such interest (including, without limitation, transfer by bequest or inheritance) shall be completed within a reasonable time, not to exceed 180 days from the date of death or permanent disability, and shall be subject to all terms and conditions applicable to transfers contained in this Article 17.
Failure to transfer the interest in this Agreement or such interest in Franchisee entity within said period of time shall constitute a breach of this Agreement.
Source: Item 23 — Receipts (FDD pages 52–209)
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, a franchisee may seek to transfer the Franchise Agreement under various circumstances, including voluntary sales, or involuntary transfers due to events like divorce, insolvency, or death. The term 'transfer' is broadly defined to include any voluntary, involuntary, direct, or indirect assignment, sale, gift, or other disposition of any interest in the agreement, the ownership of the franchise, or the shoppe's assets.
Specifically, if the franchisee is a partnership or business association, the addition or deletion of a partner or member, or the transfer of partnership or membership interests among existing partners or members, constitutes a transfer. If the franchisee is a corporation or LLC, a transfer occurs with any proposed transfer or assignment of 15% or more of the ownership interests, whether in a single or multiple transactions, involving issued and outstanding shares or newly issued shares. If the franchisee is an individual, a transfer includes moving the franchise to a corporation or other entity controlled by them.
In the event of the death or permanent disability of the franchisee (or the individual controlling the franchisee entity), their representative is required to transfer the franchisee's interest in the agreement to a third party approved by Bambu within 180 days. Failure to do so constitutes a breach of the agreement. Bambu retains the right to approve or disapprove any proposed sale or transfer, ensuring that all requirements and rights related to such transfers are met.
Bambu also maintains a right of first refusal in the event of any proposed sale, transfer, or assignment of rights under the MUD Agreement or any interest in it, including franchise development rights or related assets. The franchisee must grant Bambu a 30-day right to purchase these rights or assets on the same terms and conditions as the initial Franchise Agreement. This provision allows Bambu to maintain control over the franchise's ownership and operation, ensuring consistency and adherence to brand standards.