What are the limitations on discovery in an arbitration proceeding related to the Bambu franchise?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
nue in full force and effect subsequent to and notwithstanding the expiration or termination of this Agreement.
23.3 Limitations on Proceedings.
- 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.
- c. Franchisee agrees that no claims may be brought on its behalf or on behalf of any of the Franchisee Affiliates by any third party, including but not limited to any association representing Franchisee.
- 23.4 Injunctive Relief. Notwithstanding anything to the contrary contained in this Article 23, Bambu and Franchisee will each have the right in a proper case to obtain temporary or preliminary injunctive relief from a court of competent jurisdiction. Each party agrees that the other party may have such temporary or preliminary injunctive relief, without bond, but upon due notice, and with the sole remedy in the event of the entry of such injunctive relief being the dissolution of such injunctive relief, if warranted, upon hearing
duly held (all claims for damages by reason of the wrongful issuance of such injunction being expressly waived by each party).
Source: Item 23 — Receipts (FDD pages 52–209)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, Bambu outlines specific limitations on arbitration proceedings. Arbitration is to be conducted on an individual basis, meaning neither Bambu nor the franchisee can start an arbitration with a third party against the other, except for their respective affiliates. Consolidation of arbitration proceedings with others is not allowed, and neither party can attempt to certify a class or participate in a class action against the other.
However, there are exceptions. If the franchisee is controlled by, controls, or is in active concert with another Bambu franchisee, distributor, or developer, or if there is a guarantor of the franchisee's obligations to Bambu, those parties can be joined in the arbitration. Additionally, owners, directors, officers, managers, partners, or other representatives or agents of the franchisee can be joined. The franchisee also agrees that no claims can be brought on their behalf or on behalf of any of their affiliates by any third party, including associations representing the franchisee.
These limitations mean that a Bambu franchisee is restricted in their ability to pursue joint claims or class actions against Bambu, which could limit their legal options in case of a dispute. However, the ability to join related parties under certain conditions provides some flexibility. Franchisees should be aware of these restrictions and consider the implications for dispute resolution before investing in a Bambu franchise. The decision as to whether a claim is subject to mandatory arbitration shall be made by an arbitrator, not a court.
Bambu and the franchisee retain the right to seek temporary or preliminary injunctive relief from a court of competent jurisdiction. This injunctive relief can be obtained without bond, but upon due notice. The sole remedy in the event of such injunctive relief is the dissolution of the injunction if warranted upon a hearing, with each party expressly waiving claims for damages due to wrongful issuance of the injunction. Any such action will be brought as provided in the franchise agreement.