Does the Bambu Franchise Agreement allow for 'blue penciling' of unenforceable provisions?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
- 24.9 Invalidity.
In the event that any arbitrator or court of competent jurisdiction determines that any provision of this Agreement, including but not limited to any of the restrictive covenants contained in Article 21 hereof, are unenforceable as written for any reason, including for purposes of the restrictive covenants, reasons that the areas of restriction exceed the reasonable maximum time period, geographic area or scope, then the parties hereby request and authorize the arbitrator or court to "blue pencil" such provision so as to make it enforceable and to best carry out the intent of the parties, or to deem such provision severed from this Agreement if it cannot be so modified.
The holding, declaration or pronouncement shall not adversely affect any other provisions of this Agreement, which shall otherwise remain in full force and effect.
Source: Item 23 — Receipts (FDD pages 52–209)
What This Means (2025 FDD)
According to the 2025 Bambu Franchise Disclosure Document, the Franchise Agreement addresses the possibility of a court finding a provision unenforceable. Specifically, it covers the scenario where a court deems a provision, such as a restrictive covenant, unenforceable due to unreasonable restrictions on time, geographic area, or scope.
In such cases, the Bambu agreement requests and authorizes the arbitrator or court to "blue pencil" the provision. This means the court is asked to modify the provision to make it enforceable while still attempting to fulfill the original intent of both parties. If the court cannot modify the provision in this way, it may sever the provision from the agreement entirely.
This clause also states that if a provision is deemed unenforceable, it will not impact the validity of the remaining provisions within the agreement. The rest of the agreement will remain in full effect. This is a fairly standard clause in franchise agreements, designed to preserve as much of the original contract as possible in the event that specific parts are successfully challenged.