What rate of interest applies to amounts due in a dispute related to the Bambu MUD Agreement?

According to Bambu's 2025 Franchise Disclosure Document, in the event of any dispute regarding the MUD Agreement, the non-prevailing party is responsible for paying the prevailing party all amounts due, damages, costs, and expenses, including reasonable attorneys' fees. Interest on these amounts accrues at the highest rate allowable by law from the date of default. This means that if a Bambu franchisee loses a dispute with Bambu, they will have to pay not only the original amount in dispute but also cover Bambu's legal costs and interest on the total amount.

The interest rate is not a fixed percentage but is instead tied to the highest rate legally permissible, which can vary depending on the jurisdiction. This could potentially be a high rate, adding significantly to the financial burden of the non-prevailing party. Franchisees should be aware of this clause and its potential financial implications before entering into a MUD Agreement with Bambu.

This type of clause is relatively standard in franchise agreements, as it aims to protect the franchisor from incurring losses due to legal disputes and encourages compliance with the agreement. However, the specific rate being the 'highest allowable by law' is something a prospective franchisee should take note of, as it could be higher than a standard fixed interest rate. Franchisees should consult with a legal professional to fully understand the implications of this clause and the potential financial risks involved.