Under the Bambu MUD Agreement, what is the franchisee obligated to do regarding indemnification of Bambu and its representatives?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
- 7.2. Indemnification. 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, the MUD (Multi-Unit Development) Agreement stipulates that the franchisee must indemnify and hold harmless Bambu and its representatives. This includes Bambu's officers, directors, members, managers, agents, and representatives, collectively referred to as "Indemnified Parties." The franchisee's indemnification extends to all fines, suits, proceedings, claims, demands, or actions of any kind, including reasonable attorneys' fees. These liabilities must arise directly or indirectly from the franchisee's activities, actions, or failure to act under the MUD Agreement, or from the operation of their shoppes developed under the MUD Agreement.
For the purposes of this indemnification, "claims" encompass all obligations, actual and consequential damages, and costs reasonably incurred in defending against any claim against the Indemnified Parties. This includes, but is not limited to, 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 retains the right to defend any such claim against it.
This indemnification obligation remains in full effect even after the expiration or termination of the MUD Agreement. This means that even if the agreement ends, the franchisee is still responsible for covering any liabilities that arise from their actions during the term of the agreement. This is a significant responsibility for the franchisee, as it could potentially involve substantial financial burdens depending on the nature and extent of any claims or legal actions brought against Bambu or its representatives due to the franchisee's operations.
In essence, this clause protects Bambu from liabilities resulting from the franchisee's actions or inactions related to the developed shoppes. Prospective franchisees should carefully consider the potential financial implications of this indemnification clause and consult with legal counsel to fully understand their obligations and potential risks.