What are the consequences for a Bumper Man franchisee making an unauthorized transfer?
Bumper_Man Franchise · 2025 FDDAnswer from 2025 FDD Document
anchisor.
(e) Severability and Enforceability of Covenants. Each of the covenants contained in this Section 17 will be considered separate and independent from each other. If any covenant in this Agreement which restricts competitive activity is deemed unenforceable for any reason, but would be enforceable by reducing or substituting any part of it in accordance with Section 26(a), such covenant will be enforced to the fullest extent permissible under Applicable Law.
18. DEFAULT AND TERMINATION.
The occurrence of any of the following will adversely and substantially affect the interests of Franchisor and will be deemed an Event of Default constituting just cause for exercising any of the remedies set forth herein:
- (a) Franchisor may terminate this Agreement upon delivery to Franchisee of Notice as a result of the occurrence of any of the following Events of Default and Franchisee's failure to cure such Event of Default within the cure period described below, if any, and absent a cure period, immediatel
Source: Item 23 — RECEIPTS (FDD pages 45–180)
What This Means (2025 FDD)
According to the 2025 Bumper Man Franchise Disclosure Document, making an unauthorized transfer of the franchise can lead to termination of the Franchise Agreement. Specifically, if a Bumper Man franchisee (or any of its Principals or Affiliates) makes an unauthorized transfer pursuant to Section 16 of the agreement, it is considered an Event of Default.
An Event of Default allows Bumper Man to terminate the agreement with the franchisee. The FDD states that the franchisor may terminate the agreement upon delivery of notice to the franchisee as a result of the occurrence of any of the Events of Default. In the case of an unauthorized transfer, there is no cure period, meaning that termination can occur immediately upon Bumper Man's notice to the franchisee.
In addition, the definition of "Transfer Fee" includes the condition that the franchisee must pay Bumper Man a transfer fee equal to 20% of the purchase price of the Bumper Business set forth in the asset purchase agreement between Franchisee and the transferee. This implies that Bumper Man may retroactively require this payment even if the transfer was initially unauthorized.