Can Bambu contest the validity of provisions in applicable riders to the franchise agreement?

According to Bambu's 2025 Franchise Disclosure Document, Bambu is not precluded from contesting the validity, enforceability, or applicability of provisions in any applicable rider to the franchise agreement. These riders are incorporated into the agreement and modify it accordingly, with the rider's terms superseding the franchise agreement's terms in case of conflict. The provisions in any applicable rider are included as a condition to registration or use in certain jurisdictions. This means that while the riders are part of the agreement, Bambu retains the right to challenge their validity, enforceability, or applicability in legal actions related to the agreement, its rescission, or termination.

This clause is significant for prospective franchisees because it clarifies the franchisor's position on the enforceability of state-specific rider provisions. Even though a rider might be required for registration in a particular state, Bambu reserves the right to argue against its provisions in court. This could have implications for franchisees if a dispute arises where a rider provision is critical to their case.

For example, several state-specific riders such as those for Virginia, Washington, Illinois, Indiana, Hawaii, and North Dakota include modifications to the standard franchise agreement to comply with local laws. These modifications can range from deferring initial fees to altering termination and renewal rights. Despite these riders being in place, Bambu maintains the option to contest their validity, which introduces an element of uncertainty for franchisees relying on those rider provisions. Franchisees should seek legal counsel to understand the potential implications of this clause and how it might affect their rights and obligations under the franchise agreement, especially in their specific state or province.