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Is Bambu prohibited from requiring a general release of claims from a Bambu franchisee if the law prohibits it?

Bambu Franchise · 2025 FDD

Answer from 2025 FDD Document

[Item 23: Receipts]

"A general release does not extend to claims which the creditor does not know or suspect to exist in the creditor's favor at the time of executing the release, which if known by the creditor, must have materially affected the creditor's settlement with the debtor."

Franchisee and the Franchisee Affiliates waive and relinquish every right or benefit which they have, or may have, under Section 9-13-02 of the North Dakota Century Code, and under any similar provisions of any other law (as may be applicable to this Release), to the fullest extent that they may lawfully waive such right or benefit pertaining to the subject matter of this Release. In connection with such waiver and relinquishment, with respect to the Released Claims, Franchisee and the Franchisee Affiliates acknowledge that they are aware and informed that they may hereafter discover facts in addition to or different from those that Franchisee and the Franchisee Affiliates now know or believe to be true with respect to the subject matter of this Release, but that it is their intention to settle and release fully, and finally and forever, all Released Claims, disputes and differences, known or unknown, suspected or unsuspected, which now exist, may exist or heretofore existed, and in furtherance of such intention, the Release given herein shall be and remain in effect as a full and complete release, notwithstanding the discovery or existence of any such additional or different facts that would have affected the release of all Released Claims. Franchisee and the Franchisee Affiliates agree to defend, indemnify and hold harmless Bambu and the Bambu Affiliates from any and all Released Claims arising out of, directly or indirectly, the assertion by Franchisee and the Franchisee Affiliates (or any person or entity by, through, or on behalf of Releasor) of any Released Claims, positions, defenses, or arguments contrary to this Section l.(c) of this Release. [Item 23: Receipts]

All initial franchise fees payable to Bambu shall be deferred until the day Franchisee's Bambū shoppe opens for business.

  1. The following language is added to Section 15.4 of the Franchise Agreement:

Bambu or its affiliates agree to protect Franchisee against claims of infringement or unfair competition with respect to Franchisee's authorized use of the Marks, when Franchisee's rights granted therein warrant protection.

  1. The following sentence is added at the end of Sections 17.2.f and 18.3.d of the Franchise Agreement:

Any release executed in connection herewith will not apply to any claims that may arise under the Minnesota Franchise Act.

  1. The following statement is added at the end of Sections 18.4, 19.1 and 19.2 of the Franchise Agreement:

Minnesota law provides a Franchisee with certain termination and nonrenewal rights. Minn. Stat. Sec. 80C.14 Subd. 3, 4 and 5 require, except in certain specified cases, that a Franchisee be given 90 days' notice of termination (with 60 days to cure) and 180 days' notice for nonrenewal of this Agreement.

  1. The following is added to the end of Section 21.1:

Minnesota Statutes Section 181.991 prohibits a franchisor from restricting, restraining, or prohibiting in any way a franchisee from soliciting or hiring an employee of the franchisor or an employee of a franchisee of the same franchisor. Any such restrictions in Section 21.1.c are hereby deemed deleted.

Source: Item 23 — Receipts (FDD pages 52–209)

What This Means (2025 FDD)

According to the 2025 Bambu Franchise Disclosure Document, Bambu includes specific stipulations regarding general releases that vary by state to comply with local laws. For instance, the FDD includes specific clauses addressing the release of unknown claims and waivers of specific state laws like California Civil Code Section 1542, Montana Code Annotated Section 28-1-1602, and North Dakota Century Code Section 9-13-02. These clauses ensure that franchisees are aware of their rights under these state laws and the implications of waiving those rights.

In Minnesota, Bambu's FDD explicitly states that any release executed will not apply to claims arising under the Minnesota Franchise Act. Furthermore, certain restrictions that might limit a franchisee's ability to solicit or hire employees of Bambu or other Bambu franchisees are deemed deleted to comply with Minnesota Statutes Section 181.991. These modifications indicate that Bambu acknowledges and adheres to specific state laws that protect franchisees' rights and limit the scope of general releases.

These provisions suggest that Bambu is aware of the legal limitations regarding general releases in various states and has taken steps to ensure compliance. By tailoring the release agreements to acknowledge and respect state-specific laws, Bambu aims to avoid enforcing releases that are prohibited or unenforceable under those laws. A prospective franchisee should carefully review the specific provisions applicable to their state and consult with legal counsel to fully understand their rights and obligations regarding any release of claims.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.