Does the Bambu MUD Agreement address the issue of severability?
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 Bambu's 2025 Franchise Disclosure Document, the MUD (Multi-Unit Development) Agreement does address the issue of severability in the context of the broader agreement. Specifically, it states that if any provision of the agreement is deemed unenforceable by an arbitrator or court, the parties request and authorize the arbitrator or court to modify the provision to make it enforceable, or to sever the provision from the agreement if it cannot be modified. This is often referred to as a "blue pencil" provision. The document also states that the holding, declaration, or pronouncement of invalidity shall not adversely affect any other provisions of the agreement, which shall otherwise remain in full force and effect.
This clause is important for prospective Bambu franchisees because it means that if a portion of the MUD Agreement is found to be invalid, the entire agreement will not necessarily be voided. Instead, the parties intend for the problematic provision to be either modified to be enforceable or removed from the agreement altogether, while the remaining provisions continue to apply. This can provide a level of assurance that the core aspects of the agreement will remain in place even if specific details are challenged.
Severability clauses are common in franchise agreements and other legal contracts. They aim to preserve the overall intent and enforceability of the agreement, even if certain parts are later deemed invalid. Franchisees should be aware of such clauses and understand their implications, as they can affect the rights and obligations of both the franchisor and the franchisee. In the case of Bambu, this clause suggests a willingness to ensure the MUD Agreement remains effective to the fullest extent possible, even if adjustments are needed.