Does the Bambu franchisee's obligation to indemnify Bambu continue after the termination or expiration of the Franchise Agreement?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee shall indemnify and hold harmless Bambu and its officers, directors, members, managers, agents and representatives ("Indemnified Parties") from all fines, suits, proceedings, claims, demands or actions of any kind or nature, including reasonable attorneys' fees, from anyone whomsoever, directly or indirectly, arising or growing out of, or otherwise connected with Franchisee's activities, actions or failure to act, under this MUD Agreement or Franchisee's operation of its shoppes developed under this MUD Agreement. For purposes of this indemnification, claims shall mean and include all obligations, actual and consequential damages and costs reasonably incurred in the defense of any claim against the Indemnified Parties, including, without limitation, reasonable accountants', attorneys' and expert witness fees, costs of investigation and proof of facts, court costs, other arbitration or litigation expenses and travel and living expenses. Bambu shall have the right to defend any such claim against it. This indemnity shall continue in full force and effect subsequent to and notwithstanding the expiration or termination of this MUD Agreement.
Source: Item 23 — Receipts (FDD pages 52–209)
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, the franchisee's obligation to indemnify Bambu extends beyond the termination or expiration of the MUD (Multi-Unit Development) Agreement. Specifically, the franchisee is required to protect Bambu and its associated parties from any liabilities, including legal fees, that arise from the franchisee's actions or inactions related to the MUD Agreement or the operation of their Bambu shops developed under it.
This indemnification clause means that even after the MUD Agreement ends, whether through termination or expiration, the franchisee remains responsible for covering costs associated with any claims or legal actions linked to their past operation of the Bambu shops. This includes all obligations, actual and consequential damages, and costs reasonably incurred in defending against any claim, such as accountant, attorney, and expert witness fees, investigation costs, court costs, and travel expenses.
Bambu retains the right to defend against any claim. This ensures that Bambu can control the legal strategy and protect its interests, while the franchisee is responsible for covering the associated costs. This obligation survives the termination or expiration of the MUD Agreement, meaning that even after the franchise relationship ends, the franchisee remains financially responsible for any liabilities stemming from their actions during the term of the agreement.
This is a significant consideration for prospective franchisees, as it highlights the long-term financial responsibilities associated with operating a Bambu franchise. Franchisees should carefully consider the potential risks and ensure they have adequate insurance coverage and risk management strategies in place to mitigate potential liabilities that could arise during and after the franchise term.