What is the effect of the California Rider on Section 19.2 of the Bambu Franchise Agreement?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
- Release. Franchisee, for itself and its affiliates, and their respective current and former successors, assigns, officers, shareholders, directors, members, managers, agents, heirs and personal representatives ("Franchisee Affiliates"), hereby fully and forever unconditionally releases and discharges Bambu and its affiliates, and their respective successors, assigns, agents, representatives, employees, officers, shareholders, directors, members, managers and insurers (collectively referred to as "Bambu Affiliates") from any and all claims, demands, obligations, actions, liabilities and damages of every kind and nature whatsoever ("Released Claims"), in law or in equity, whether known or unknown, which Franchisee or the Franchisee Affiliates may now have against Bambu or the Bambu Affiliates or which may hereafter be discovered. Without limiting the foregoing, Released Claims includes, but is not limited to, all claims, demands, obligations, actions, liabilities and damages, known or unknown, in any way arising from or relating to: (i) any relationship or transaction with Bambu or the Bambu Affiliates, (ii) the Franchise Agreement or any related agreements, and (iii) the franchise relationship, from the beginning of time until the date of this Release.
[APPLIES ONLY IN CALIFORNIA] 1.(a) Release of Unknown Claims and Waiver of California Law. Franchisee and the Franchisee Affiliates acknowledge that they are aware and informed that the laws of California may purport to limit or reduce the effect of a general release with respect to claims not known or suspected by them at the time of execution of the Release, such as Section 1542 of the Civil Code of the State of California, which provides as follows:
"A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release which, if known by him, must have materially affected the settlement with the debtor."
Source: Item 23 — Receipts (FDD pages 52–209)
What This Means (2025 FDD)
Based on the 2025 Bambu Franchise Disclosure Document, the California Rider addresses the release of claims and waiver of California law, particularly concerning unknown claims. It highlights that California law, specifically Section 1542 of the Civil Code, may limit the effect of a general release regarding claims not known or suspected at the time of execution. This section states that a general release does not extend to claims unknown to the creditor, which, if known, would have materially affected the settlement with the debtor.
For a prospective Bambu franchisee in California, this means that when signing a release, they are acknowledging the potential limitations imposed by California law regarding unknown claims. This acknowledgment is crucial because it informs the franchisee that they may retain rights to pursue claims that were not known or suspected at the time the release was signed. This is particularly relevant in franchise agreements where long-term relationships and complex business dealings can lead to unforeseen issues.
However, it is important to note that the Bambu Franchise Agreement includes language stating that Bambu and the franchisee do not agree with the above language and believe that each of the provisions of the Agreement, including all choice of law provisions, are fully enforceable. Bambu and Franchisee intend to fully enforce all of the provisions of the Agreement and all other documents signed by them, including but not limited to, all venue, choice-of-law, arbitration provisions and other dispute avoidance and resolution provisions and to rely on federal pre-emption under the Federal Arbitration Act. This indicates a potential legal conflict, as Bambu intends to enforce all provisions of the agreement, including those that might be affected by California's specific protections for franchisees regarding unknown claims. Prospective franchisees should seek legal counsel to fully understand their rights and obligations under both the franchise agreement and California law.