Does the Bambu Successor Franchise Rider release claims brought by the Franchisee's officers?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
| Deferred Non-refundable Franchise Fees: | | | |---|---|---| | Balance Beginning of year | $ 1,436,817 | $ 1,658,775 | | Deferral of non-refundable franchise fees | 345,500 | 362,500 | | Recognition of non-refundable franchise fees | (638,862) | (584,458) | | Balance at End of Year | $ 1,143,455 | 1,436,817 | 9. Release. Franchisee, for itself and its affiliates, and their respective current and former successors, assigns, officers, shareholders, directors, members, managers, agents, heirs and personal representatives ("Franchisee Affiliates"), hereby fully and forever unconditionally release and discharge Bambu and its affiliates, and their respective successors, assigns, agents, representatives, employees, officers, shareholders, directors, members, managers and insurers (collectively referred to as "Bambu Affiliates") from any and all claims, demands, obligations, actions, liabilities and damages of every kind and nature whatsoever ("Released Claims"), in law or in equity, whether known or unknown, which Franchisee or the Franchisee Affiliates may now have against Bambu or the Bambu Affiliates or which may hereafter be discovered.
Source: Item 23 — Receipts (FDD pages 52–209)
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, the Successor Franchise Rider does include a release of claims brought by the franchisee's officers. Specifically, the franchisee, along with its affiliates, which include current and former officers, fully releases Bambu from all claims. This release covers all possible claims, whether known or unknown, that the franchisee or its affiliates (including officers) may have against Bambu.
This means that when a franchisee exercises their option for a successor franchise, they must sign a rider that releases Bambu from any potential claims. This release extends not only to the franchisee as an individual or entity but also to their officers, shareholders, directors, members, managers, agents, heirs, and personal representatives. The claims covered include those arising from any relationship or transaction with Bambu, the Franchise Agreement, or the franchise relationship itself, from the beginning of time until the date the rider is signed.
For a prospective Bambu franchisee, this has significant implications. Before renewing their franchise agreement, they (and their officers) must be aware that they are giving up any right to sue Bambu for any reason, including reasons they may not even be aware of at the time of signing the release. This is a standard practice in franchising, but it is crucial to understand the scope of the release before agreeing to it. Franchisees should carefully consider this provision and seek legal counsel to fully understand its implications before signing the successor franchise rider.
It is important to note that the FDD includes specific clauses addressing the release of unknown claims, particularly concerning California law (Section 1542 of the Civil Code). This section emphasizes that the franchisee is aware they may be giving up rights to claims they don't yet know about. Similar waivers and relinquishments are mentioned for Montana and North Dakota laws, indicating that Bambu seeks to ensure the release is as comprehensive as possible, within the bounds of applicable state laws.