In a legal dispute regarding the Bambu Franchise Agreement, what costs is the prevailing party entitled to?

According to Bambu's 2025 Franchise Disclosure Document, in the event of a dispute regarding the Franchise Agreement, the prevailing party is entitled to certain financial remedies. Specifically, the non-prevailing party in any legal action, arbitration, or other proceeding is obligated to pay the prevailing party all amounts due, damages, costs, and expenses. This includes reasonable attorneys' fees incurred during the action or proceeding. This means that if a Bambu franchisee wins a legal dispute against Bambu, or vice versa, the losing party will be responsible for covering these costs.

This provision aims to protect the prevailing party by ensuring they are not financially burdened by the costs of litigation or arbitration. For a prospective Bambu franchisee, this clause offers some financial security should they need to pursue legal action to enforce their rights under the agreement. Conversely, it also creates a financial risk, as the franchisee would be responsible for Bambu's legal costs if Bambu prevails in a dispute.

It's important to note that this clause applies to any legal action, arbitration, or other proceeding, indicating a broad scope of coverage. Franchisees should be aware of this potential financial obligation and factor it into their risk assessment when considering a Bambu franchise. Additionally, the MUD agreement also contains a similar clause, where in the event of any dispute between the parties to the MUD Agreement, the non-prevailing party will pay the prevailing party all amounts due and all damages, costs and expenses, including reasonable attorneys' fees, incurred by the prevailing party in any legal action, arbitration, mediation, or other proceeding as a result of such dispute, plus interest at the highest rate allowable by law, accruing from the date of such default.