Under the Bambu franchise agreement, what is the definition of 'Other Agreements' in the context of cross-default provisions?

According to Bambu's 2025 Franchise Disclosure Document, the term "Other Agreements" in the context of cross-default provisions refers to all agreements between the franchisee and/or any companies affiliated with the franchisee, on one hand, and Bambu and/or any companies affiliated with Bambu, on the other hand. This definition is crucial because a default by the franchisee under any of these "Other Agreements" will be considered a default under the franchise agreement itself, and vice versa. This creates a broad cross-default provision.

This cross-default provision has significant implications for a prospective Bambu franchisee. It means that if a franchisee defaults on any agreement with Bambu or its affiliates, such as a loan agreement or a supply agreement, it will automatically be considered a default under the franchise agreement. This could lead to the termination of the franchise agreement, even if the default is not directly related to the operation of the Bambu franchise. Similarly, a default under the Bambu franchise agreement can trigger defaults in these other agreements.

For example, if a franchisee has a separate lease agreement with an affiliate of Bambu for the premises of the store, a failure to pay rent under that lease could trigger a default under the franchise agreement. This type of provision is not uncommon in franchising, as franchisors want to protect their brand and ensure that franchisees meet all their obligations. However, it is important for prospective franchisees to carefully review all agreements they have or may have with Bambu and its affiliates to understand the full scope of the cross-default provisions and the potential consequences of a default under any of those agreements.

It is also important to note that a default by any guarantor of the franchise agreement or any of the "Other Agreements" will also be deemed a default of the franchise agreement. This means that if a franchisee's personal guarantor defaults on their obligations, it could also lead to the termination of the franchise agreement. This highlights the importance of ensuring that any guarantors are financially stable and fully understand their obligations under the guaranty.