In a dispute regarding the Bambu MUD Agreement, who pays attorneys' fees and costs?

According to Bambu's 2025 Franchise Disclosure Document, in the event of a dispute regarding the MUD Agreement, the non-prevailing party is responsible for covering the prevailing party's associated costs. This includes all amounts due, damages, expenses, and reasonable attorneys' fees incurred during any legal action, arbitration, mediation, or other proceeding. Additionally, the non-prevailing party must also pay interest at the highest rate allowable by law, accruing from the date of default.

This clause ensures that the party found to be in the wrong bears the financial burden of the dispute, which can include significant legal expenses. For a prospective Bambu franchisee, this means that if they enter into a dispute with Bambu over the MUD Agreement and do not prevail, they will be responsible for not only their own legal costs but also Bambu's. This could represent a substantial financial risk, especially if the dispute is complex or involves significant sums of money.

Conversely, if the franchisee prevails in a dispute with Bambu, Bambu would be responsible for covering the franchisee's legal costs and other associated expenses. This provision aims to discourage frivolous claims and encourage both parties to act reasonably in resolving disputes. It is a fairly standard clause in franchise agreements, intended to protect the prevailing party and ensure they are not financially penalized for enforcing their rights under the agreement.

It is important for a potential Bambu franchisee to fully understand this clause and consider the potential financial implications of a dispute. Franchisees should consult with an attorney to assess the risks and understand their rights and obligations under the MUD Agreement.