If a Bambu franchisee controls another Bambu franchisee, can those parties be joined in arbitration?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
- a. Bambu and Franchisee agree that arbitration will be conducted on an individual basis only. Neither party shall commence any arbitration with a third party against the other, or join with any third party in any arbitration involving Bambu and Franchisee other than the Bambu Affiliates and the Franchisee Affiliates. Further, neither Bambu nor Franchisee shall attempt to consolidate or otherwise combine in any manner an arbitration proceeding involving Bambu and Franchisee with another arbitration of any kind, nor shall Bambu or Franchisee attempt to certify a class or participate as a party in a class action against the other.
- b. The foregoing notwithstanding, in the event Franchisee controls, is controlled by or is in active concert with another franchisee, distributor, or developer of Bambu, or there is a guarantor of some or all of the Franchisee's obligations to Bambu, then the joinder of those parties to any arbitration between Bambu and Franchisee shall be permitted, and in all events, the joinder of an owner, director, officer, manager, partner or other representative or agent of Franchisee shall be permitted.
Source: Item 23 — Receipts (FDD pages 52–209)
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, under certain conditions, multiple parties can be joined in an arbitration case. Generally, Bambu and the franchisee agree that arbitration will be conducted on an individual basis. Neither party can start an arbitration with a third party against the other or combine an arbitration proceeding involving Bambu and a franchisee with another arbitration of any kind. Class actions are also prohibited.
However, there is an exception to this rule. If a Bambu franchisee controls, is controlled by, or is working in active concert with another franchisee, distributor, or developer of Bambu, then these parties can be joined in any arbitration between Bambu and the franchisee. Additionally, the joinder of an owner, director, officer, manager, partner, or other representative or agent of the franchisee is permitted.
This clause ensures that all related parties are present in the arbitration if there are multiple franchisees or related entities involved, streamlining the dispute resolution process. It is a fairly common practice in franchising to allow for the joinder of related parties in arbitration to resolve disputes efficiently and avoid inconsistent outcomes.