Who has the right to defend claims against Bambu under the indemnification clause of the Bambu MUD Agreement?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee shall indemnify and hold harmless Bambu and its officers, directors, members, managers, agents and representatives ("Indemnified Parties") from all fines, suits, proceedings, claims, demands or actions of any kind or nature, including reasonable attorneys' fees, from anyone whomsoever, directly or indirectly, arising or growing out of, or otherwise connected with Franchisee's activities, actions or failure to act, under this MUD Agreement or Franchisee's operation of its shoppes developed under this MUD Agreement. For purposes of this indemnification, claims shall mean and include all obligations, actual and consequential damages and costs reasonably incurred in the defense of any claim against the Indemnified Parties, including, without limitation, reasonable accountants', attorneys' and expert witness fees, costs of investigation and proof of facts, court costs, other arbitration or litigation expenses and travel and living expenses. Bambu shall have the right to defend any such claim against it. This indemnity shall continue in full force and effect subsequent to and notwithstanding the expiration or termination of this MUD Agreement.
Source: Item 23 — Receipts (FDD pages 52–209)
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, under the MUD (Multi-Unit Development) Agreement, Bambu retains the right to defend any claim made against it. This right is part of the indemnification clause, where the franchisee agrees to protect Bambu from liabilities arising from the franchisee's actions or inactions related to the MUD Agreement or the operation of their shoppes. This indemnification covers a wide range of potential claims, including legal fees and damages.
This means that even though the franchisee is responsible for covering the costs and liabilities associated with claims arising from their business operations, Bambu has the authority to control the legal defense of such claims. This is a significant point for prospective franchisees, as it means they may be required to fund a defense strategy determined by Bambu, even if they disagree with it.
The indemnification clause remains in effect even after the MUD Agreement expires or is terminated. Therefore, franchisees should be aware that their responsibility to indemnify Bambu extends beyond the active term of the agreement. This ongoing obligation underscores the importance of understanding and managing risks associated with the operation of Bambu shoppes.
This type of indemnification clause is common in franchise agreements, as it protects the franchisor from liabilities caused by the franchisee's business. However, the specific terms can vary, so prospective Bambu franchisees should carefully review the indemnification provisions in both the Franchise Agreement and the MUD Agreement with legal counsel to fully understand their obligations and potential liabilities.