In case of conflict between the Bambu MUD Agreement and the Franchise Agreement, which agreement's terms control?

According to Bambu's 2025 Franchise Disclosure Document, the terms of the Multi-Unit Development (MUD) Agreement will control in the event of any conflict with the terms of the Franchise Agreement. This is explicitly stated in section 8.9, titled "Controlling Terms," of the MUD Agreement. This clause ensures that the MUD Agreement, which governs the broader development relationship, takes precedence over individual Franchise Agreements when discrepancies arise.

This controlling terms clause is significant for a prospective Bambu multi-unit franchisee because it clarifies the hierarchy of agreements. The MUD Agreement outlines the franchisee's obligations and rights regarding the development of multiple locations, while the Franchise Agreement pertains to the operation of a single location. If a situation arises where the two agreements have conflicting terms, the franchisee can rely on the MUD Agreement to govern the overall development plan.

However, it's also important to note that any addenda to the MUD Agreement take precedence over the original MUD Agreement terms. As stated in Attachment A, "in the event of a conflict in terms between the MUD Agreement and this Addendum, the terms of this Addendum shall be controlling." Furthermore, if any of the state-specific riders in Attachment B are marked as 'Applicable,' the terms of those riders will supersede the terms of the MUD Agreement. Therefore, franchisees must carefully review all components of the MUD Agreement, including any addenda and applicable riders, to fully understand their obligations and rights.

This type of clause is relatively common in multi-unit franchise agreements, as it provides clarity and consistency in the relationship between the franchisor and franchisee. Prospective franchisees should carefully review both the MUD Agreement and the Franchise Agreement, along with any addenda or riders, to understand the full scope of their obligations and rights. Consulting with a legal professional experienced in franchise law is advisable to ensure a complete understanding of the agreements.