In the event of conflicting laws, which law prevails for a Bambu franchise?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
Bambu shall have the right, at its option, to terminate this Agreement and all rights granted Franchisee hereunder, without affording Franchisee any opportunity to cure any default (except where expressly indicated and subject to any state laws to the contrary, where state law shall prevail), effective upon notice to Franchisee upon the occurrence of any of the following events:
Franchisee may terminate the Agreement upon any grounds available by law.
However, the foregoing choice of law shall not be considered a waiver of any right conferred upon Franchisee by the provisions of Article 33 of the New York State General Business Law. Bambu and Franchisee do not agree with the above language and believe that each of the provisions of the Agreement, including all venue and 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.
In the event of any conflict between the terms of this MUD Agreement and the terms of the Franchise Agreement, the terms of this MUD Agreement shall control.
Source: Item 23 — Receipts (FDD pages 52–209)
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, the Franchise Agreement specifies that in termination events, where there are conflicting state laws, the state law will prevail. Specifically, this applies when Bambu seeks to terminate the agreement, giving the franchisee certain protections based on local jurisdiction. This ensures that franchisees are not unfairly penalized due to circumstances that might be viewed differently under varying state regulations.
Additionally, the New York Rider to the Franchise Agreement includes stipulations that the choice of law in the agreement does not waive any rights conferred upon the franchisee by the provisions of Article 33 of the New York State General Business Law. However, Bambu states that they do not agree with this language and believe that all provisions of the agreement, including venue and choice-of-law provisions, are fully enforceable. Bambu intends to rely on federal pre-emption under the Federal Arbitration Act.
Furthermore, in the event of any conflict between the terms of the Multi-Unit Development (MUD) Agreement and the terms of the Franchise Agreement, the terms of the MUD Agreement shall control. This is relevant for franchisees who enter into a MUD agreement with Bambu to develop multiple franchise locations.