What are the consequences for a Bumper Man franchisee's unauthorized transfer of the franchise?
Bumper_Man Franchise · 2025 FDDAnswer from 2025 FDD Document
- (viii) Franchisee (or any of its Principals or Affiliates) makes an unauthorized Transfer pursuant to Section 16;
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:
(e) Effect of Franchisor's Consent. Any Transfer without Franchisor's consent constitutes an Event of Default rendering such Transfer void and of no effect.
(ttt) "Transfer Fee" means the transfer fee Franchisee must pay to Franchisor as set forth in Section 16 and in an amount equal to 20% of the purchase price of the Bumper Business set forth in the asset purchase agreement between Franchisee and the transferee.
Source: Item 23 — RECEIPTS (FDD pages 45–180)
What This Means (2025 FDD)
According to Bumper Man's 2025 Franchise Disclosure Document, making an unauthorized transfer of the franchise constitutes an Event of Default. This means that if a franchisee transfers control of the business, its assets, or equity interest without prior written consent from Bumper Man, the transfer is considered void and has no effect.
Specifically, Section 18 of the Franchise Agreement states that an unauthorized transfer adversely and substantially affects the interests of Bumper Man and is considered just cause for exercising remedies. This implies that Bumper Man has the right to terminate the Franchise Agreement if a franchisee engages in an unauthorized transfer.
Furthermore, Section 16(ttt) defines "Transfer Fee" as a fee the franchisee must pay to Bumper Man equal to 20% of the purchase price of the Bumper Business set forth in the asset purchase agreement between the franchisee and the transferee. However, this fee is associated with an approved transfer, not an unauthorized one, where the consequences are more severe, including potential termination of the franchise agreement.