Does the Bambu Successor Franchise Rider apply to unsuspected claims?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
"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 Franchisee and the Franchisee Affiliates 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 they now know or believe to be true with respect to the subject matter of this Release, but that it is Franchisee's and the Franchisee Affiliates' 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 their behalf) of any Released Claims, positions, defenses, or arguments contrary to this Section 7(c) of this Rider.
Source: Item 23 — Receipts (FDD pages 52–209)
What This Means (2025 FDD)
According to the 2025 Bambu Franchise Disclosure Document, the Successor Franchise Rider includes a release of claims, addressing both known and unknown claims, including unsuspected claims. Specifically, the rider includes language indicating the franchisee's intent to fully release all claims, disputes, and differences, whether known or unknown, suspected or unsuspected. This release remains effective even if additional or different facts are discovered that would have affected the release of all released claims. This broad release is further emphasized by the franchisee's agreement to defend and indemnify Bambu against any claims arising from positions contrary to this release.
However, the FDD also contains some state-specific exceptions to this broad release. For example, the California Rider includes an acknowledgment by the franchisee that California law may limit the effect of a general release regarding claims not known or suspected at the time of execution. Similarly, the Hawaii Rider stipulates that any release executed will not apply to claims arising under the Hawaii Franchise Investment Law. These state-specific provisions suggest that the enforceability of the release, particularly concerning unsuspected claims, may vary depending on the franchisee's location.
In Montana and North Dakota, franchisees acknowledge that they may discover new facts but intend to release all claims fully, whether known, unknown, suspected, or unsuspected. They waive rights under Montana Code Annotated Section 28-1-1602 and North Dakota Century Code Section 9-13-02, or similar laws, to the extent they can lawfully waive such rights. This indicates a clear intention to include unsuspected claims in the release within those states, subject to the limits of applicable law.
Prospective franchisees should carefully review the specific rider applicable to their state and consult with legal counsel to understand the full scope and implications of the release, particularly concerning unsuspected claims. They should also be aware of their rights under state franchise laws, as some states may offer protections that limit the enforceability of such releases.