What happens if a provision of the Bambu franchise agreement is deemed unenforceable?
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 FDD, if a court or arbitrator finds any provision of the Bambu franchise agreement unenforceable, including restrictive covenants, the parties request and authorize the arbitrator or court to modify the provision to make it enforceable while still carrying out the parties' intent. This process is often referred to as "blue penciling." If the provision cannot be modified in this way, it will be severed from the agreement.
This clause ensures that as much of the original agreement as possible remains in effect. The "blue penciling" approach is a common legal practice aimed at preserving the core intentions of a contract even if specific terms are found to be overly broad or restrictive. For a Bambu franchisee, this means that the entire agreement won't be invalidated due to a single unenforceable clause.
The FDD specifies that the holding, declaration, or pronouncement of unenforceability will not affect any other provisions of the agreement, which will remain in full force and effect. This reinforces the intent to maintain the integrity of the agreement as a whole, even if individual parts are challenged. Franchisees should be aware of this clause, as it could impact their rights and obligations under the franchise agreement if certain provisions are disputed.