In a dispute regarding the Bambu Franchise Agreement, who pays the legal fees?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
If Bambu or Franchisee must enforce any of the provisions or rights under this Agreement in any action at law or in equity and if the Bambu and/or Franchisee is successful in such litigation or arbitration as determined by the court or arbitrator in a final judgment or decree, then the Associate shall pay Bambu or Franchisee, as applicable, all costs, expenses and reasonable attorneys' fees incurred by Bambu and/or Franchisee (including without limitation such costs, expenses and fees on any appeals), and if Bambu and/or Franchisee receives a judgment in any such action or proceeding, such costs, expenses and attorneys' fees shall be included as part of such judgment.
Definitions.
Source: Item 23 — Receipts (FDD pages 52–209)
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, the responsibility for legal fees in a dispute depends on the outcome of the legal action. Specifically, if either Bambu or the franchisee is required to enforce their rights under the Franchise Agreement in a legal action or arbitration, the prevailing party is entitled to recover all costs, expenses, and reasonable attorneys' fees from the other party. This includes costs incurred during appeals, and these fees will be included as part of the judgment. This clause aims to make the non-prevailing party responsible for the legal costs incurred by the successful party.
In the context of the Multi-Unit Development (MUD) Agreement, a similar principle applies. In the event of any dispute between the parties, the non-prevailing party will be responsible for paying the prevailing party all amounts due, damages, costs, and expenses, including reasonable attorneys' fees. This applies to any legal action, arbitration, mediation, or other proceeding resulting from the dispute. Additionally, the prevailing party is entitled to interest on these amounts at the highest rate allowable by law, accruing from the date of default.
These provisions are fairly standard in franchise agreements. They serve to protect the rights of both the franchisor and the franchisee by ensuring that the party at fault in a dispute bears the financial burden of resolving it. However, prospective franchisees should be aware of these clauses and understand that they could be responsible for Bambu's legal fees if they do not prevail in a dispute.