What happens if a court finds a provision of the Bambu Franchise Agreement unenforceable?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
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 Bambu's 2025 Franchise Disclosure Document, if a court determines any provision of the Franchise Agreement is unenforceable, the parties request and authorize the court to modify the provision to make it enforceable, while still carrying out the intent of the parties. This modification is sometimes referred to as "blue penciling." If the court cannot modify the provision to make it enforceable, then the parties authorize the court to sever that specific provision from the agreement.
This clause is important for prospective Bambu franchisees because it demonstrates the intent to keep the agreement intact as much as possible. Rather than the entire agreement being voided due to one unenforceable clause, the remaining provisions will stay in effect. This limits uncertainty and ensures that the core business relationship continues.
However, the FDD also states that this action by the court should not adversely affect any other provisions of the agreement, which will remain in full force and effect. This ensures that the rest of the agreement remains valid and enforceable, providing clarity and stability for both Bambu and the franchisee.