Under what circumstances can the Bambu franchisor terminate the Franchise Agreement with cause?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
| | Termination by franchisor with cause | Sections 19.1 and 19.2 of FA; Sections 4.3 and 4.4 of MUDA | We can terminate only if you commit any one of several listed violations. | | (g) | "Cause" defined-curable defaults | Sections 19.1 and 19.2 of FA; Section 4.3 of MUDA | For the Franchise Agreement: 48 hours for misuse of the Marks, purchases from unapproved suppliers, or other failures to comply with FRC Materials or other standards, 5 days for monetary defaults, 7 days for filing of a legal action in violation of the dispute resolution terms in the Franchise Agreement, and generally 30 days for other defaults. For the Development Agreement: 30 days' notice for breach. If we provide you with a notice of default, we and our affiliates may suspend services to you until each default is cured. | | (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. |
Source: Item 17 — (FDD pages 44–46)
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, the franchisor can terminate the Franchise Agreement with cause if the franchisee commits certain violations, as detailed in Sections 19.1 and 19.2 of the Franchise Agreement and Sections 4.3 and 4.4 of the Multi-Unit Development Agreement. These violations are categorized as either curable or non-curable defaults.
Curable defaults, which allow the franchisee a period to correct the issue, include misuse of the Bambu Marks, purchasing from unapproved suppliers, failure to comply with FRC Materials or other standards (with a 48-hour cure period), monetary defaults (with a 5-day cure period), filing a legal action violating dispute resolution terms (with a 7-day cure period), and other general defaults (typically with a 30-day cure period). If the franchisee fails to remedy these issues within the specified time, Bambu can terminate the agreement. During the cure period, Bambu may suspend services to the franchisee.
Non-curable defaults, which allow for immediate termination by Bambu, include unauthorized disclosure, conviction of a crime, abandonment of the franchise, failure to have Bambu Certified Team Leaders present or available for three consecutive days, unapproved transfers of the franchise, bankruptcy, assignment for the benefit of creditors, unsatisfied judgments, levies, foreclosures, repeated violations of the agreement, violation of restrictive covenants, issuing two insufficient funds checks, health and safety violations, misrepresentations, sexual harassment or discrimination, breach of other agreements with Bambu or its affiliates, unenforceability or inadequacy of a guaranty, or becoming subject to the PATRIOT Act. Note that the enforceability of termination due to bankruptcy may be limited by federal bankruptcy law.
These termination conditions are typical in franchise agreements, as they protect the brand's reputation, ensure compliance with standards, and safeguard the franchisor's interests. Prospective franchisees should carefully review Sections 19.1 and 19.2 of the Franchise Agreement, as well as Sections 4.3 and 4.4 of the Multi-Unit Development Agreement, to fully understand the circumstances that could lead to termination and their obligations to maintain the franchise agreement.