Under what circumstances can Bambu bring an action in court instead of arbitration?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
is reinstated, or, in the alternative, pay any delinquencies in premium payments and charge the same back to Franchisee.
23. DISPUTE RESOLUTION
23.1 Arbitration. All controversies, disputes, claims, causes of action and/or alleged breaches or failures to perform between Bambu, its subsidiaries and affiliated companies, and/or its or their shareholders, members, managers, officers, directors, agents, employees and attorneys, in their representative capacity (collectively, the "Bambu Affiliates"), on the one side, and Franchisee, and its affiliated companies and/or its or their Bambū Certified Team Leaders, employees, officers, directors, owners, and/or guarantors (collectively, the "Franchisee Affiliates"), on the other side, if applicable, arising out of or related to: (1) this Agreement; (2) the relationship of the parties; (3) the validity of this Agreement; or (4) any Bambū system will be submitted for binding arbitration to either the Judicial Arbiter Group ("JAG") or the American Arbitration Association ("AAA"), as selected by the party submitting the demand; except for actions brought which are related to or based on the Marks or to enforce the provisions of Article 21 of this Agreement, which actions Bambu, at its option, may bring either in a court of competent jurisdiction or in arbitration. Notwithstanding the language above, if the action is based on a separate agreement or instrument between Franchisee or any of the Franchisee Affiliates and Bambu or any of the Bambu Affiliates, such as a promissory note or lease, the dispute resolution procedure in that agreement or instrument will control rather than this Section 23.1; provided, that, at Bambu's sole option, any claim of Bambu or any Bambu Affiliates against Franchisee or any of the Franchisee Affiliates based on such other agreement or instrument may be brought in arbitration in conjunction with a dispute between the parties
that is subject to arbitration under this Section, regardless of any provisions to the contrary contained in that other agreement or instrument. Arbitration proceedings will be conducted in Denver, Colorado and will be heard by one arbitrator in accordance with the then current rules of the AAA that apply to commercial arbitration. The decision as to whether a claim is subject to mandatory arbitration shall be made by an arbitrator, not a court, except that the decision whether the arbitration may proceed as a class action shall be made by a court. The arbitrator shall be a resident of the State of Colorado knowledgeable of Colorado law and fluent in English. The arbitration proceeding and all other hearings shall be conducted in English only, although Franchisee shall have the right, at Franchisee's option and sole expense, to have a translator present at the proceeding or other hearings. The expense of a translator shall not be considered a cost or expense related to an action pursuant to Section 24.6 of this Agreement.
Source: Item 23 — Receipts (FDD pages 52–209)
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, there are specific instances where Bambu can pursue legal action in court rather than mandatory arbitration. Generally, disputes related to the franchise agreement are subject to binding arbitration. However, Bambu retains the option to bring actions in a court of competent jurisdiction under certain circumstances.
Specifically, Bambu may choose to bring an action in court for matters related to or based on the Marks (trademarks) or to enforce the provisions of Article 21 of the agreement. Additionally, Bambu can seek temporary or preliminary injunctive relief from a court of competent jurisdiction in appropriate cases. Furthermore, any legal proceeding by Bambu or its affiliates that is not subject to mandatory arbitration can be initiated in a court of competent jurisdiction within the country, state, province, or geographic area where the franchisee's store is located or where the franchisee or their affiliates reside or own assets.
It is important to note that if Bambu chooses to pursue a claim in court that is not subject to mandatory arbitration, the franchisee and its affiliates consent to jurisdiction and venue in the state and federal courts of Colorado, U.S.A., and waive any objections to personal jurisdiction or venue in those courts. However, the franchisor can also bring a case in a jurisdiction where the franchisee's shoppe is located. This section also includes a mutual waiver of the right to a jury trial if a claim may be brought in court.
This flexibility allows Bambu to address specific legal issues, such as trademark protection or requests for injunctive relief, through the court system while maintaining arbitration as the primary method for resolving other disputes. Prospective franchisees should understand these conditions and consider the implications of potentially litigating in Colorado or another jurisdiction depending on the nature of the claim.